If the License Agreement between Budget and the Licensee expires, terminates, or is transferred, what happens to this agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
If Licensee's License Agreement expires or is terminated for any reason, then this Agreement will terminate on such date of expiration or termination, without any notice to Licensee.
Upon termination of this Agreement and license (which for all purposes of this Agreement will mean termination by either party for any reason or expiration of the term of this Agreement), Licensee will: (a) pay to Budget, on or before noon on the effective date of termination, such License Fees, the unpaid balance of the Initial License Purchase Fee and all other fees or monies Licensee owes to Budget or any of the Related Entities; Licensee waives any right or claim to offset the amounts due to Budget or any of the Related Entities with amounts due to Licensee; (b) promptly pay all fees or monies Licensee owes to other Network licensees or any other person or entity (e.g., phone bills, rent or airport concession fees), whether incurred under this Agreement or otherwise in the conduct of the Rental Business; (c) not thereafter, directly or indirectly, identify itself in any manner as an Budget licensee or use the System, or any part thereof, the name "Budget" or any variation thereof, or any of the Marks, forms, slogans, signs, symbols, devices, or materials constituting part of the System; (d) return to Budget all Manual, Standard Rental Agreements, advertising materials, and all other materials bearing the "Budget" name or containing any of the Standards; (e) take all steps necessary to transfer to Budget, or to such person as Budget may direct, all telephone numbers, facsimile and electronic communication lines, and electronic addresses and domain names used by it in the conduct of the Rental Business, and, upon Budget's request, advise the telephone company and any third party service providers serving the Territory and other appropriate parties that Licensee has no further interest in such telephone numbers, facsimile and electronic communication lines, and electronic addresses and domain names and approve their transfer to Budget or to such other person as Budget may direct; (f) upon notice from Budget, take all steps necessary to effectuate
the sale, transfer or assignment to Budget of the airport licenses, concession agreements, leases and permits as specified in Paragraph 8.2 and, at Budget's sole election, any other agreements pertaining to the use of real estate which was used in conjunction with Licensee's terminated Rental Business, including any or all Locations, electronic addresses and domain names used by Licensee in the conduct of the Rental Business and airport licenses, leases and permits as specified in Paragraph 8.2 herein; (g) take such action as will be necessary to cancel any assumed name or equivalent registration which contains the "Budget" name and any website established in connection with operating the Rental Business; (h) take all steps necessary to transfer to Budget, or to such person as Budget may direct, all existing reservations and open rental agreements; (i) take all steps to properly secure and or destroy customer PII (as defined in Paragraphs 9.11 and 9.21) in accordance with applicable laws and in accordance with Budget's data retention policies (which are applicable to any data obtained through Budget, and (j) promptly remove and destroy all Budget signage. Licensee will furnish Budget, within thirty (30) days after termination of this Agreement, evidence satisfactory to Budget of its compliance with these obligations.
Upon the service of a notice under Paragraphs 11.2 or 11.4 hereof, expiration of the Term under Paragraph 11.1 or a cure period under Paragraph 11.3, Budget will be entitled to enter into a new license agreement with another person granting the person the right to conduct a Rental Business in the Territory.
Upon termination of this Agreement for any reason, Budget will have the option (but not the obligation), to be exercised by written notice thereof to Licensee (the "Exercise Notice") within thirty (30) days following the termination, to purchase the assets of the Rental Business at fair market value taking the goodwill of such business into consideration.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the consequences of the License Agreement expiring or terminating are explicitly detailed. If the License Agreement expires or is terminated for any reason, the agreement between ABCR (presumably a related entity) and the Licensee will also terminate on the same date, without any need for prior notice to the Licensee. This automatic termination underscores the interconnectedness of the License Agreement and any supplementary agreements.
Upon termination of the License Agreement, the Licensee is obligated to take several actions. The Licensee must settle all outstanding payments, including License Fees, the unpaid balance of the Initial License Purchase Fee, and any other monies owed to Budget or its related entities. The Licensee also relinquishes any rights to offset these amounts with any claims against Budget. Furthermore, the Licensee is prohibited from identifying themselves as a Budget licensee or using any part of the Budget system, name, or associated marks. The Licensee must also return all manuals, standard rental agreements, advertising materials, and any other materials bearing the Budget name or containing any of the brand's standards.
Additionally, the Licensee is required to transfer all telephone numbers, facsimile and electronic communication lines, electronic addresses, and domain names used in the Rental Business to Budget or its designee. The Licensee must also advise the telephone company and third-party service providers of this transfer. The Licensee must also facilitate the transfer or assignment of airport licenses, concession agreements, leases, and permits to Budget, as well as cancel any assumed name registrations or websites associated with the Budget business. The Licensee is also responsible for transferring existing reservations and open rental agreements to Budget, securing or destroying customer PII in accordance with applicable laws and Budget's data retention policies, and removing all Budget signage.
Budget also retains specific rights upon termination of the License Agreement. Budget has the right to enter into a new license agreement with another person to operate a Rental Business in the same territory. Budget also has the option, but not the obligation, to purchase the assets of the Rental Business at fair market value, taking into consideration the goodwill of the business. This option must be exercised within thirty days following the termination by providing written notice to the Licensee.