Where in the Budget License Agreement are defaults which cannot be cured defined as 'cause' for termination?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
law applies. | | | Provision | Section of the Budget License Agreement | | f. | Termination by Budget with cause | 11.3, 11.4, and 11.11 | | g. | "Cause" defined— defaults which can be cured | 11.3 | | h. | "Cause" defined— defaults which cannot be cured | 11.4 | | | Provision | Section of the Budget License Agreement | Summary | |----|----------------------------------------------------|-------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | i.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 66–70)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, defaults that cannot be cured, which constitute 'cause' for termination of the Budget License Agreement, are defined in Section 11.4 of the agreement. This means that if a franchisee commits a violation of the agreement that is deemed irreparable, Budget has the right to terminate the franchise license.
Understanding the specific defaults that Budget considers incurable is crucial for prospective franchisees. These defaults typically involve severe breaches of the franchise agreement, such as fraudulent activities, abandonment of the business, or repeated failures to meet critical operational standards. Franchisees should carefully review Section 11.4 of the Budget License Agreement to fully understand their obligations and the potential consequences of non-compliance.
It is important for potential Budget franchisees to seek legal counsel to fully understand the implications of these termination clauses. Knowing what actions could lead to immediate termination without an opportunity to correct the issue can help franchisees avoid costly mistakes and maintain a healthy relationship with Budget.