Is a General Release included in the Budget franchise documents?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
The License Agreement requires you to sign a general release of claims upon transfer of the License Agreement. California Corporations Code Section 31512 provides that any condition, stipulation or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of that law or any rule or order thereunder is void. Section 31512 might void a waiver of your rights under the Franchise Investment Law (California Corporations Code Section 31000 – 31516). Business and Professions Code Section 20010 might void a waiver of your rights under the Franchise Relations Act (Business and Professions Code Sections 20000 – 20043).
Despite the disclosures above, Budget and you agree to interpret and enforce the provisions of the License Agreement and related documents as written to the maximum extent the law allows."
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the License Agreement requires franchisees to sign a general release of claims upon transfer of the License Agreement. However, this requirement may be limited by state laws. Specifically, California Corporations Code Section 31512 states that any condition that waives compliance with any provision of that law is void, potentially nullifying a waiver of rights under the Franchise Investment Law. Similarly, California's Business and Professions Code Section 20010 might void a waiver of rights under the Franchise Relations Act. Despite these potential limitations, Budget intends to enforce the provisions of the License Agreement and related documents to the maximum extent the law allows.
For prospective Budget franchisees, this means that while a general release is required upon transfer, its enforceability can vary depending on the applicable state laws. In states like California, certain waivers of rights may not be enforceable. This is designed to protect franchisees from unknowingly giving up their legal rights under franchise laws.
It is important for franchisees to understand the specific protections afforded by their state's franchise laws and to consult with legal counsel to fully understand the implications of signing a general release. Franchisees should be aware that Budget aims to enforce the agreement as much as legally permissible, so knowing the extent to which state laws may override certain provisions is crucial.