Is a Budget franchisee allowed to operate their franchise from a location outside the licensed territory?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
You may serve any customer without regard to his or her domicile. You may not operate your Budget Franchise or any part of it from a location outside the licensed territory. You may not pick up customers who reside outside your Budget Franchise's territory unless authorized by Budget in writing. Otherwise, there are no restrictions on your accepting customers who reside outside your licensed territory or on other Network members' accepting customers who reside inside your licensed territory. You must obtain Budget's prior written consent for your initial location, any change in your location, or construction of additional facilities (see Item 11).
Source: Item 12 — TERRITORY (FDD pages 61–63)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a franchisee is not allowed to operate their Budget franchise from a location outside of their licensed territory. The FDD states explicitly that a franchisee "may not operate your Budget Franchise or any part of it from a location outside the licensed territory." This restriction ensures that each franchise operates within its designated area, maintaining territorial boundaries.
While franchisees cannot operate outside their territory, they are generally allowed to serve any customer regardless of where that customer lives. However, franchisees "may not pick up customers who reside outside your Budget Franchise's territory unless authorized by Budget in writing." This means that while you can rent to out-of-territory customers, actively soliciting or picking them up from outside your designated area requires explicit written permission from Budget.
These territorial restrictions are typical in franchising to protect each franchisee's market area and prevent overlap or unfair competition between locations. However, Budget also retains significant rights, including the ability to operate or franchise other Budget locations within or outside your territory under certain circumstances, such as for National Accounts or if the franchisee fails to comply with the Budget License Agreement. Therefore, understanding the specific boundaries and any exceptions is crucial for prospective franchisees.