In the Budget franchise agreement, what is the effect of Budget exercising its power of attorney?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.5 Power of Attorney.
Licensee, in order to secure the performance of Licensee's obligations under this Agreement, hereby irrevocably appoints Budget as its attorney for the limited purposes of executing, signing, perfecting, doing and (if required) registering every such further assurance, document, act or thing as is required to (a) cause discontinuation of Licensee's use of the Marks (or any other related or similar name or use hereunder) and (b) transfer to Budget or its designee, all telephone numbers, 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.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the company holds a power of attorney to ensure the franchisee fulfills their obligations under the License Agreement. Budget can exercise this power of attorney to discontinue the franchisee's use of Budget's marks or any similar names, and to transfer specific assets to Budget or its designee following the termination of the License Agreement for any reason. These assets include telephone numbers, communication lines, electronic addresses, domain names used in the rental business, and airport-related licenses, concession agreements, leases, and permits as specified in Paragraph 8.2 of the agreement.
Budget's power of attorney is limited to these specific actions, which are designed to protect Budget's brand and ensure a smooth transition of assets after termination. The FDD states that Budget's exercise of this power is conclusive evidence of its right to do so, meaning that if Budget acts under the power of attorney, it is considered proof that they are entitled to take those actions. This clause gives Budget a clear legal mechanism to reclaim control over its brand identity and essential business assets upon the end of the franchise relationship.
For a prospective Budget franchisee, this means that upon termination of the agreement, Budget has the legal authority to take immediate control of key business elements like phone numbers and online presence. This could significantly impact the franchisee's ability to continue a similar business independently after the franchise ends, as these assets are crucial for customer communication and operations. The franchisee should carefully consider the implications of this power of attorney and how it might affect their future business prospects should the franchise agreement terminate.