For a Budget franchisee in Illinois, what happens if the jurisdictional requirements of the Illinois Franchise Disclosure Act are not met independently of the Rider?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Rider is made and entered into as of the day of , 20 by |
|---|
| and between Avis Budget Car Rental, LLC. (hereinafter referred to as "Avis Budget Car |
| Rental") and d/b/a Budget Rent A Car of |
| ("Licensee"). |
| 1. |
| Background. Avis Budget Car Rental and Licensee are parties to that certain |
| Rental |
| System |
| Agreement |
| dated |
| , |
| 20 |
| (the |
| "Rental |
| System |
| Agreement") that has been executed concurrently with the execution of this Rider. This Rider is |
| annexed to and forms part of the Rental System Agreement. This Rider is being executed because |
| (a) Licensee is a resident of the State of Illinois, and/or (b) the Budget Franchise that Licensee will |
| operate under the License Agreement with Budget Rent a Car System, Inc. (pursuant to which the |
| parties are signing the Rental System Agreement) will be located within the State of Illinois and |
| the offering or sales activity with respect to that License Agreement occurred or will occur in |
| the State of Illinois. Each provision of this Rider shall be effective only to the extent, with respect |
| to such provision, that the jurisdictional requirements of the Illinois Franchise Disclosure Act are |
| met independently without reference to this Rider. |
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Rider to the License Agreement includes provisions that are effective only if the jurisdictional requirements of the Illinois Franchise Disclosure Act are met independently, without relying on the Rider itself. This means that the stipulations within the Rider, which are designed to comply with Illinois franchise law, will only apply if the offering or sales activities related to the Budget franchise occurred within Illinois, or if the franchisee is a resident of Illinois, and these conditions are met regardless of the Rider's existence.
In practical terms, this clause ensures that Budget complies with Illinois law without automatically triggering its provisions simply by including the Rider. The jurisdictional requirements of the Illinois Franchise Disclosure Act must be satisfied on their own. If these requirements are not met independently, the specific protections and modifications outlined in the Rider would not be enforced.
For a prospective Budget franchisee in Illinois, this highlights the importance of understanding the specific conditions under which the Illinois Franchise Disclosure Act applies. It also emphasizes that the Rider is intended to supplement, not replace, the independent fulfillment of Illinois's legal requirements. Franchisees should consult with legal counsel to ensure full compliance and to understand their rights and obligations under both the franchise agreement and Illinois law.