When evaluating a transfer, what litigation and bankruptcy history timeframe does Budget consider for the Transferee and related parties?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Transferring Licensee will submit to Budget written notice of its intent to transfer, together with all of the following documents and information for Budget's review, with such documents and information being certified as true, correct and complete by Transferee, its shareholders, members and/or partner(s):
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- The bankruptcy and litigation history, for the past five (5) years, of the Transferee, its shareholders and/or partners and its management team.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, when a licensee seeks to transfer their franchise, Budget requires the proposed transferee to submit certain documents for review. As part of this review, Budget assesses the litigation and bankruptcy history of the transferee, related companies, stockholders, members, partners, and the management team.
Specifically, Budget requires the submission of bankruptcy and litigation history for the past five years. This information helps Budget assess the risk associated with the proposed transferee and their ability to successfully operate the Budget franchise.
Budget uses this information, along with other factors such as financial strength, credit history, and managerial ability, to determine whether to approve the transfer. This comprehensive review process is designed to protect the Budget brand and ensure that all franchisees meet certain standards.