Does Budget's failure to enforce a breach by the Budget licensee constitute a waiver of future breaches?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
facsimile/electronic communication lines, electronic addresses and domain names used by it in the conduct of the Rental Business and airport licenses, concession agreements, leases and permits as specified in Paragraph 8.2, following the termination of this Agreement for any reason. The exercise by Budget of such power will be conclusive evidence of its right to exercise the same.
- 14.6 Waiver. Budget and Licensee may by written instrument unilaterally waive or reduce any obligation of or restriction upon the other under this Agreement, effective upon delivery of written notice to the other or any other effective date stated in the notice of waiver. Any waiver a party hereto grants will be without prejudice to any other rights it may have, will be subject to its continuing review and may be revoked, in its sole discretion, at any time and for any reason, effective upon delivery to the other party hereto of ten (10) days' prior written notice. Failure by Budget and/or the Related Entities on the one hand or Licensee on the other, to either enforce any breach or default or series of breaches or defaults in performance by the other; or to exercise any right, power or option given to Budget and/or its Related Entities on the one hand or Licensee on the other hereunder;
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the failure by Budget to enforce any breach or default by a licensee does not constitute a waiver of the provisions of the License Agreement, Standards, or related agreements with respect to any such breach or default, or any subsequent breach or default. This means that even if Budget overlooks a violation of the agreement by a licensee, it does not give up its right to enforce that provision in the future. Budget retains the right to require exact and strict compliance with all provisions of the agreement at any time.
Budget and the licensee can, however, by written instrument, unilaterally waive or reduce any obligation or restriction upon the other under the License Agreement. This waiver becomes effective upon delivery of written notice to the other party or on any other effective date stated in the notice of waiver. Any waiver granted by either party is without prejudice to any other rights they may have, and it is subject to continuing review. The waiver can be revoked at any time, at the granting party's sole discretion, for any reason, with ten days' prior written notice to the other party.
This section of the FDD clarifies that Budget's flexibility in enforcing the franchise agreement does not set a precedent. Budget retains its rights to enforce all terms of the agreement in the future, unless it explicitly waives those rights in writing. This protects Budget's ability to maintain standards across its franchise system while also allowing it to work with individual franchisees when appropriate. Prospective franchisees should understand that Budget's past actions do not limit its future enforcement options.