Where in the Budget License Agreement are defaults that can be cured defined as 'cause' for termination?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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 |
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 can be cured, which are defined as 'cause' for termination, are specified in Section 11.3 of the Budget License Agreement. This means that if a franchisee fails to meet certain obligations outlined in the agreement, but has the opportunity to correct those failures, the specific terms and conditions related to those curable defaults are detailed in Section 11.3.
This is important for prospective Budget franchisees because it clarifies where to find the information about what constitutes a curable default and the process for rectifying it. Understanding these provisions can help a franchisee avoid termination by taking timely action to cure any defaults. It also provides a framework for understanding their rights and responsibilities regarding potential breaches of the agreement.
In the franchise industry, it is common for franchise agreements to differentiate between defaults that can be cured and those that cannot. This distinction allows franchisors like Budget to address minor infractions with an opportunity for correction, while reserving the right to terminate the agreement for more serious or uncorrectable breaches. Franchisees should carefully review Section 11.3 to fully understand their obligations and the potential consequences of failing to meet them.