What happens if the conditions for renewal are not met within the prescribed time for the Budget Agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Budget Agreement term will expire if the conditions for renewal are not met within the specified time frame. The initial term of the agreement commences on the effective date and continues until the expiration date, as indicated in the Summary Pages (Section 8). Following this initial term, the agreement can be renewed for successive five-year terms, provided certain conditions are satisfied at least 30 days before the current term's expiration. A renewal fee, as specified in the Summary Pages (Section 10(r)), is required for each renewal. Budget agrees to provide the Licensee with notice of the approaching expiration.
The conditions that must be met for renewal include: the licensee not being in default of any provision of the agreement, the licensee being owned by the same beneficial owners or their permitted transferees, the licensee signing the then-current form of the license agreement, the licensee upgrading the rental business to meet current system standards, and the licensee and its owners signing a general release of claims against Budget.
If these conditions are not fulfilled within the prescribed time before the current term expires, the agreement will terminate on the previously established expiration date. Budget is obligated to notify the licensee of the approaching expiration and provide the necessary documentation well in advance to allow compliance with the renewal provisions.