Does the general release required for Budget renewal include then-existing litigation between the Licensee and Budget?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
11.1 Term. This Agreement will commence upon the Effective Date and, unless sooner terminated as hereinafter provided, remain in force until the Expiration Date identified in the Summary Pages (Section 8). Thereafter, this Agreement may renew, for successive five (5) year terms for a Renewal Fee identified in the Summary Pages (Section 10(r)) in advance of such renewal. Each successive five (5) year term shall commence upon the expiration of the previous term, provided that the following conditions are met at least thirty (30) days prior to the expiration of the applicable term: (a) Licensee is not then in default of any provision of this Agreement or the then-current form of License Agreement of Budget; (b) Licensee is then owned by the same beneficial owners as own Licensee currently or by their Permitted Transferees (as defined in Paragraph 12.2(b)); (c) Licensee signs the then-current form of License Agreement, appropriately amended to reflect the material economic terms contained within the then-current form of License Agreement, where applicable; (d) Licensee upgrades the Rental Business to conform to any then-current System Standards and specifications, and (e) Licensee and its owners sign a general release, in a form satisfactory to Budget, of any and all claims against Budget and its Related Entities and their respective shareholders, officers, directors, employees, agents, representatives, successors and assigns; provided, however, such general release will exclude thenexisting litigation between Licensee and Budget or the Related Entities and the then-existing claims of Licensee against Budget or the Related Entities in the ordinary course of business under this Agreement or any other agreement between such parties, which litigation and claims will be identified in such release. If such conditions are not met within the prescribed time period referred to above prior to the expiration of the current term, such term will expire upon the Expiration Date previously established in accordance with this Paragraph 11.1. Budget agrees to provide Licensee with notice of the approaching expiration of any term and the documentation referenced above sufficiently in advance of such expiration date for Licensee to comply with the renewal provisions of this Paragraph 11.1.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the general release required for franchise renewal does not include then-existing litigation between the licensee and Budget. To renew the License Agreement for additional five-year terms, the licensee must meet several conditions at least thirty days before the current term expires. These conditions include not being in default, maintaining the same beneficial owners, signing the then-current form of the License Agreement, upgrading the rental business to current system standards, and signing a general release.
However, this general release specifically excludes any litigation already in progress between the licensee and Budget or its related entities. It also excludes existing claims the licensee has against Budget or related entities that arise in the ordinary course of business under the License Agreement or any other agreement between the parties. Any such litigation and claims will be identified in the release.
This exclusion protects the franchisee from having to waive their rights in ongoing disputes as a condition of renewal. It ensures that franchisees can continue to pursue legitimate claims against Budget without jeopardizing their ability to extend their franchise term. This provision provides some security for franchisees who may have grievances with Budget, allowing them to seek resolution without fear of losing their franchise.