What happens if a Budget licensee defaults under any agreements signed with Budget's Related Entities?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee agrees that its compliance with the terms of all airport concession agreements, voluntary participation agreements and other agreements signed by Licensee with Budget, including other license agreements, Programs (whether signed agreements or as part of the Standards) and any of the Related Entities are essential to this Agreement and a default under any of these agreements and/or Programs will be a default under and breach of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a licensee's compliance with all agreements signed with Budget and its related entities is essential to the License Agreement. This includes airport concession agreements, voluntary participation agreements, other license agreements, and participation in Programs, whether these are signed agreements or part of Budget's standards.
Specifically, if a Budget licensee defaults on any of these agreements or Programs with Budget or its related entities, it will be considered a default and breach of the License Agreement itself. This "cross-default" provision means that a failure to meet obligations in one area can trigger consequences for the entire franchise agreement.
This clause is significant for prospective Budget franchisees because it broadens the scope of what constitutes a default. Franchisees must ensure they are compliant not only with the License Agreement but also with any other agreements they have with Budget or its related entities. Failure to do so could lead to termination of the franchise agreement, even if the default is not directly related to the core obligations of the franchise.