If a Budget franchisee is a resident of Illinois, does the Rider apply?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Rider is made and entered into as of the day of , 20 by |
|---|
| and between Avis Budget Car Rental, LLC. (hereinafter referred to as "Avis Budget Car |
| Rental") and d/b/a Budget Rent A Car of |
| ("Licensee"). |
| 1. |
| Background. Avis Budget Car Rental and Licensee are parties to that certain |
| Rental |
| System |
| Agreement |
| dated |
| , |
| 20 |
| (the |
| "Rental |
| System |
| Agreement") that has been executed concurrently with the execution of this Rider. This Rider is |
| annexed to and forms part of the Rental System Agreement. This Rider is being executed because |
| (a) Licensee is a resident of the State of Illinois, and/or (b) the Budget Franchise that Licensee will |
| operate under the License Agreement with Budget Rent a Car System, Inc. (pursuant to which the |
| parties are signing the Rental System Agreement) will be located within the State of Illinois and |
| the offering or sales activity with respect to that License Agreement occurred or will occur in |
| the State of Illinois. Each provision of this Rider shall be effective only to the extent, with respect |
| to such provision, that the jurisdictional requirements of the Illinois Franchise Disclosure Act are |
| met independently without reference to this Rider. |
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the Rider applies if a franchisee is a resident of Illinois. The Rider is executed because the licensee is a resident of Illinois, or the Budget franchise will be located within Illinois, and the offering or sales activity occurred or will occur in Illinois. However, each provision of the Rider is only effective if the jurisdictional requirements of the Illinois Franchise Disclosure Act are met independently, without reference to the Rider.
For Illinois franchisees, the FDD indicates that payment of initial fees will be deferred until Budget has met its initial obligations to the franchisee and the franchisee has commenced business. This requirement was imposed by the Illinois Attorney General due to Budget's financial condition. Additionally, specific sections regarding choice of forum and choice of law in the Budget License Agreement and Confidentiality Agreement are modified to reflect that Illinois law applies.
Furthermore, Illinois franchisees should be aware of extensive litigation involving Avis/Budget, as disclosed in Item 3 of the FDD, and should review Exhibit B, which contains laws and regulations concerning the car rental industry, as well as the Department of Justice settlement agreement. The FDD also stipulates that no statement, questionnaire, or acknowledgment signed by a franchisee can waive claims under Illinois franchise law, including fraud in the inducement, or disclaim reliance on behalf of Budget. This provision supersedes any other term in any document executed in connection with the franchise.