If Budget elects to accept assignment of the Concession for a Budget franchise, what terms and conditions will Budget's concession contain?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
(j) If Budget elects to accept assignment of the Concession, Budget will execute and deliver to Concessionaire a concession containing the same terms and conditions (including concession fees) as the Concession; provided, however, that Budget's concession interest will not be subject to any defaults or claims that may then exist between Concessionaire and Licensee;
(k) If Budget elects to accept assignment of the Concession, Budget will take possession of the Premises within thirty (30) days after notice of such election to Concessionaire;
(l) Nothing herein will affect Concessionaire's right to recover from Licensee any and all amounts due under the Concession or to exercise any rights of Concessionaire against Licensee as provided under the Concession, nor will Budget be responsible for Licensee's default under the Concession.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to the 2025 FDD, if Budget elects to accept assignment of the Concession, the concession will contain the same terms and conditions (including concession fees) as the original Concession agreement. However, Budget's concession interest will not be subject to any defaults or claims that may exist between the Concessionaire and the Licensee (the franchisee). Budget must notify the Concessionaire in writing within thirty (30) days after termination or expiration of the License Agreement or Budget's receipt of any notice of default by Licensee under the Concession if Budget elects to accept assignment of the Concession. Budget will take possession of the Premises within thirty (30) days after notice of such election to Concessionaire.
This means that if a Budget franchisee defaults on their Concession agreement (typically a lease or operating agreement with a third party, such as an airport authority), Budget has the option to step in and take over that agreement. This protects Budget's brand and ensures continued operation at that location. The new concession agreement will mirror the original in terms of fees and conditions, providing consistency.
However, Budget is not responsible for the franchisee's past defaults or any claims the Concessionaire may have against the franchisee. This insulates Budget from any prior financial issues between the franchisee and the Concessionaire. The Concessionaire retains the right to pursue the former franchisee for any amounts owed under the original Concession agreement.
Budget also has the right to assign its concession, or sublease the Premises, to a third party at any time after giving notice of its election to accept assignment of the Concession. If the Concessionaire refuses to consent to such assignment or sublease by Budget, Budget will have the right to revoke its acceptance of assignment of the Concession and will have no further obligations thereunder.