Where in the Budget License Agreement can I find information about the assignment of account and other receivables?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| OBLIGATION | SECTION IN AGREEMENT | ITEM IN DISCLOSURE DOCUMENT |
|---|---|---|
| w. Non-competition covenants | 1.6 and 11.9 and the Nondisclosure and Noncompetition Agreement of the Budget License Agreement | Item 17 |
| x. Dispute Resolution | 14.9 to 14.13 of the Budget License Agreement XIX of the Intercity Program | Item 17 |
| y. Intercity Rentals | The Intercity Rules and Regulations | Items 1, 6, 8, 16, and 17 |
| z. Personal Guarantee | 12.7 and Exhibit A of the Budget License Agreement were intentionally deleted | Items 1, 7, 15 |
| aa. Assignment of account | 7.7 and 14.5 of the Budget License | |
| and other receivables | Agreement |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–61)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, information regarding the assignment of accounts and other receivables can be found in sections 7.7 and 14.5 of the Budget License Agreement. This is important for prospective franchisees to understand because it outlines the conditions under which Budget might take over or manage the franchisee's accounts receivable.
Understanding these sections is crucial for a franchisee to know their rights and obligations concerning the revenue generated by their Budget franchise. The assignment of accounts receivable could impact the franchisee's cash flow and financial stability, so it's essential to review these sections carefully with a legal advisor.
This type of clause is not uncommon in franchise agreements, as it allows the franchisor to protect their brand and ensure consistent financial practices across the franchise system. However, the specific terms can vary widely, so franchisees should pay close attention to the conditions under which Budget can exercise this right and what recourse they have if they disagree with Budget's actions.