Where in the Budget License Agreement are defaults which can be cured defined as 'cause' for termination?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section of the Budget License Agreement | Summary |
|---|---|---|
| q. Non-competition during the term of the franchise | 1.6 and Nondisclosure and Noncompetition Agreement | No involvement in other vehicle rental business or system in the United States. |
| r. Non-competition covenants after the franchise is terminated or expires | 11.9, 12.6, and Nondisclosure and Noncompetition Agreement | No competing business for one year in licensed territory or within five miles of licensed territory. |
| s. Modification of the agreement | 14.2(c) | Must be reduced to writing and signed by you and Budget. However, the Manual and Standards are subject to change. |
| t. Integration/merger clause | 14.2(a) | Only terms of license agreement, its exhibits, its schedules, the Standards and Transfer Requirements are enforceable. Any representations or promises outside of the disclosure document and license agreement may not be enforceable. Notwithstanding the foregoing, nothing in this or any related agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. |
| u. Dispute resolution by | None | |
| arbitration or mediation | ||
| v. Choice of forum | 14.9 | Subject to state law, you agree to the jurisdiction of New Jersey courts. |
| w. Choice of law | 14.8 | Subject to state law, New Jersey law applies. |
| Provision | Section of the Budget License Agreement | |
| f. | Termination by Budget with cause | 11.3, 11.4, and 11.11 |
| g. |
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, and are defined as 'cause' for termination, are found in Section 11.3 of the Budget License Agreement. This means that if a franchisee fails to meet certain obligations outlined in the agreement, Budget may have grounds to terminate the franchise, but only after the franchisee has been given an opportunity to correct the issue.
This is a crucial aspect of the franchise agreement for prospective Budget franchisees to understand. It provides a degree of protection, as not every minor infraction will immediately lead to termination. Instead, it allows franchisees a chance to rectify their mistakes and continue operating their business.
However, it is equally important to carefully review Section 11.3 of the Budget License Agreement to fully understand what constitutes a curable default and the specific steps and timelines required to cure such a default. Missing the cure period or failing to adequately address the default could still result in termination. Franchisees should also be aware of what constitutes defaults that cannot be cured, as outlined in Section 11.4, which would lead to immediate termination without an opportunity to correct the issue.