Does the Budget License Agreement disclaim express representations made in the Franchise Disclosure Document?
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. |
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, the License Agreement contains an integration/merger clause that addresses the enforceability of representations and promises. Specifically, only the terms within the license agreement, its exhibits, schedules, Standards, and Transfer Requirements are considered enforceable. This means that any claims or promises made outside of these documents, including those not explicitly stated in the Franchise Disclosure Document (FDD) or the license agreement, may not be legally binding. This is a standard clause in franchise agreements, designed to limit the agreement to what is written.
However, the Budget License Agreement includes an important exception to this general rule. The integration/merger clause explicitly states that nothing within the agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits, and amendments. This provision protects the franchisee by ensuring that specific claims and promises made by Budget within the FDD remain enforceable, even if they are not repeated verbatim in the license agreement itself.
For a prospective Budget franchisee, this is a crucial point. It means that if Budget makes a specific representation in the FDD about potential earnings, required investments, or the level of support provided, that representation is not nullified by the integration clause in the license agreement. Franchisees should carefully review the FDD and note any such representations, as they can be relied upon even after signing the license agreement. This provides an added layer of security and recourse for franchisees who may have been induced to invest based on those specific representations.