Does the Budget franchise agreement specify a method of dispute resolution by arbitration or mediation?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section of the Budget License Agreement | Summary |
|---|---|---|
| q. Non-competition during the term of the franchise | 1.6 and Nondisclosure and Noncompetition Agreement | No involvement in other vehicle rental business or system in the United States. |
| r. Non-competition covenants after the franchise is terminated or expires | 11.9, 12.6, and Nondisclosure and Noncompetition Agreement | No competing business for one year in licensed territory or within five miles of licensed territory. |
| s. Modification of the agreement | 14.2(c) | Must be reduced to writing and signed by you and Budget. However, the Manual and Standards are subject to change. |
| t. Integration/merger clause | 14.2(a) | Only terms of license agreement, its exhibits, its schedules, the Standards and Transfer Requirements are enforceable. Any representations or promises outside of the disclosure document and license agreement may not be enforceable. Notwithstanding the foregoing, nothing in this or any related agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. |
| u. Dispute resolution by | None | |
| arbitration or mediation | ||
| v. Choice of forum | 14.9 | Subject to state law, you agree to the jurisdiction of New Jersey courts. |
| w. Choice of law | 14.8 | Subject to state law, New Jersey law applies. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 66–70)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the franchise agreement does not specify a method of dispute resolution by arbitration or mediation. Item 17 outlines various provisions within the Budget License Agreement, including dispute resolution. Specifically, the table indicates under the 'Dispute resolution by arbitration or mediation' provision that there is no specification for either arbitration or mediation.
Instead of arbitration or mediation, the agreement specifies that, subject to state law, franchisees agree to the jurisdiction of New Jersey courts for any disputes. Furthermore, New Jersey law will govern the interpretation and enforcement of the franchise agreement, again subject to state law.
This means that any legal disputes arising from the franchise agreement would likely be litigated in New Jersey, which may present logistical and cost considerations for franchisees located outside of New Jersey. Franchisees should consult with legal counsel to understand the implications of these clauses, especially regarding travel expenses and the potential need to hire attorneys familiar with New Jersey law. It is also important to note that the choice of forum and law are subject to state law, which may provide additional protections or requirements for franchisees.