What events related to insolvency or bankruptcy will cause immediate termination of the Budget Addendum?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
(iii) In the event of the insolvency or dissolution of Licensee, the making by Licensee of an assignment for the benefit of, or entering into any composition or arrangement with, creditors, or the appointment of a receiver or trustee for liquidation of the business of Licensee, or if bankruptcy, reorganization, insolvency or arrangement proceedings or proceedings under any other laws relating to the relief of debtors are commenced by or against Licensee, then this Addendum will immediately terminate together with all rights and interests of Licensee hereunder, without any notice to Licensee.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Budget Addendum can be immediately terminated without notice if certain insolvency or bankruptcy-related events occur involving the licensee. These events include the insolvency or dissolution of the licensee, the licensee making an assignment for the benefit of creditors, or entering into any composition or arrangement with creditors.
Additionally, the appointment of a receiver or trustee for liquidation of the licensee's business will trigger immediate termination. Furthermore, if bankruptcy, reorganization, insolvency, or arrangement proceedings, or proceedings under any other laws relating to the relief of debtors, are commenced by or against the licensee, the Budget Addendum will be terminated immediately.
This clause protects Budget from potential financial losses and operational disruptions that could arise if a franchisee becomes financially unstable. Franchisees should be aware of these conditions and understand the importance of maintaining financial stability to avoid the abrupt termination of their addendum and associated rights.