What are some examples of political boundaries that might define a Budget franchise territory?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Budget grants licenses to operate a Budget Franchise to persons with the ability to operate and promote a Budget Franchise in a particular geographic territory. Budget will assign you a territory in which to operate under the Budget License Agreement and in which you choose your business locations, subject to Budget's approval (see Item 11) Because the size of the licensed territory depends on factors like population, the presence or absence of an airport, and your operational abilities and experience, it is not possible to specify the minimum area granted to a Budget Franchise. The territory is usually described by political boundaries (for example, part of a city or county), but in certain areas might be a circle with your location at the center. Budget may use accepted industry parameters, census tracts, population densities, zip code boundaries, buying patterns, traffic counts, and projected commercial and residential growth to determine the territory's boundaries. However, a territory will not usually include a population of less than 25,000 people. During the term of your Budget License Agreement and subject to your compliance with all of your other obligations under the Budget License Agreement, Budget will not operate on its own behalf, or grant a license to another party to operate, a Budget Franchise within your territory.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Nothing in the Budget License Agreement prohibits Budget or its parent company, subsidiaries, or affiliates from: (a) engaging in the activities referred to above; (b) operating or granting others the right to operate, Budget Rent A Car businesses in the licensed territory that offer to rental vehicle other than the Vehicles including, but not limited to, renting or leasing motor vehicles that are designed, used or maintained for the transportation of property, cargo or goods (collectively defined as "Trucks"); or (c) selling their assets, engaging in a public offering or private placement of ownership interests, merging with or acquiring other corporations or entities, or being acquired by another corporation or entity (including a corporation or entity that owns or operates systems or chains that may be competitive with or similar to the Network).
Source: Item 12 — TERRITORY (FDD pages 61–63)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a Budget franchise territory is assigned based on factors such as population, the presence of an airport, and the franchisee's operational abilities. The FDD specifies that it is not possible to define a minimum territory size. The territory is often defined by political boundaries, such as part of a city or county, but could also be a circle centered on the franchise location. Budget may also use industry parameters, census tracts, zip code boundaries, buying patterns, traffic counts, and projected growth to determine boundaries. However, a territory will not usually include a population of less than 25,000 people.
It is important to note that Budget franchisees do not receive an exclusive territory. Franchisees may face competition from other franchisees, outlets owned by Budget, or other distribution channels or competitive brands controlled by Budget. Budget retains the right to operate or grant licenses to others, even within a franchisee's territory, under certain circumstances.
Budget also reserves the right to negotiate sales and marketing agreements with entities within a franchisee's territory and to use its trademarks for purposes other than the operation of the Budget franchise. Franchisees are also subject to meeting certain performance quotas, such as maintaining a minimum number of locations and achieving market penetration targets. Failure to meet these requirements could result in Budget terminating the License Agreement or converting the exclusive rights to non-exclusive rights.