How do the insurance obligations for a Budget franchisee in Item 9 relate to the computer system requirements outlined in Item 11?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Insurance | Minimum Amount |
|---|---|
| Fleet Insurance | $100,000 / $300,000 bodily injury and$50,000 per occurrence for property damage, or such other amounts as are required by local law. |
| Lessor’s / Owner’s Excess Liability Insurance | $1,000,000 combined single limit per occurrence |
| General Liability Insurance | $1,000,000 combined single limits |
| OBLIGATION | SECTION IN AGREEMENT |
| n. Insurance | 9.4 of the Budget License Agreement II, XVII, and XVIII of the Intercity Rules and Regulations |
ABCR will provide ongoing repairs, maintenance upgrades, or upgrades to Wizard as necessary. You must purchase, lease, or otherwise acquire, from sources Budget designates or approves (which might include or be limited to Budget or its affiliates), computer hardware, software and communications equipment that is totally compatible with and strictly conforms to the requirements of the Rental System Agreement as Budget may modify those requirements during the term. Budget cannot estimate the annual cost of maintenance or upgrade obligations and their associated costs. There are no contractual limitations on the frequency or cost of your obligations under this section of the Budget License Agreement.
Budget and its designees will have independent access to the Wizard system and all other computer systems, hardware, and software you use. Budget and its designees may access all information and software on such systems and there is no limitation on such access. There are no contractual limits upon our access to your computer information.
| OBLIGATION | SECTION IN AGREEMENT |
|---|---|
| r. Records and reports | 9.7, 9.8, and 9.10 of the Budget License Agreement VII-VIII of the Rental System Agreement VII, XII, XVIII, and XXIII of the Intercity Rules and Regulations Exhibit G of the Budget License Agreement |
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations, including insurance requirements, while Item 11 details the computer system requirements. Specifically, Item 9n indicates that franchisees must maintain insurance as per Section 9.4 of the Budget License Agreement and Intercity Rules and Regulations II, XVII, and XVIII. Item 11 states that franchisees must acquire computer hardware, software, and communications equipment that is compatible with the Rental System Agreement, as Budget may modify those requirements.
While the FDD excerpts do not explicitly connect the insurance obligations in Item 9 to the computer system requirements in Item 11, there is an indirect relationship. The franchisee's ability to meet the 'Records and reports' obligation (Item 9r) relies on the proper functioning of the computer systems mandated in Item 11. If the computer systems are not functioning correctly, the franchisee may not be able to provide the necessary records and reports to demonstrate compliance with the insurance requirements, potentially leading to a breach of the franchise agreement.
Furthermore, the franchisor, Budget, has independent access to the Wizard system and all other computer systems used by the franchisee. This access allows Budget to monitor compliance with various aspects of the franchise agreement, including insurance requirements. The franchisee's adherence to the computer system requirements directly impacts Budget's ability to oversee and verify the franchisee's fulfillment of their insurance obligations.
Therefore, while not directly stated, a functional computer system, as required in Item 11, is essential for a Budget franchisee to accurately maintain records and reports, which are necessary to demonstrate compliance with the insurance obligations outlined in Item 9. A prospective franchisee should ensure they understand the full scope of the required computer systems and their associated costs to avoid potential compliance issues with insurance and other operational requirements.