What must a Budget licensee do regarding licenses, concession agreements, leases, and permits to protect Budget's interests?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
to determine computations for adjusting Market Penetration Quotas. The Location and Vehicle requirements identified in the Summary Pages (Sections 4 and 11) reflect the minimum market penetration acceptable to Budget.
- 8.2 Licenses, Concession Agreements, Leases and Permits. Licensee will use its best efforts to obtain provisions in its licenses, concession agreements, leases and permits providing that (a) Budget will receive written notice of any default by Licensee under such license, concession agreement, lease or permit and an opportunity to cure such default for a period of thirty (30) days after receipt of such notice, (b) upon termination of this Agreement for any reason, such
licenses, concession agreements, leases and permits will be deemed assigned to Budget subject to acceptance of said assignment by Budget (at its option), (c) the lessor or other party to such license, concession agreement, lease or permit is authorized to deliver to Budget all information in its possession regarding the Rental Business, and (d) Budget will be authorized to enter the premises upon termination of this Agreement to remove materials and signage containing the Marks. At Budget's option, Licensee agrees that whenever it seeks to operate from an airport, it will obtain the entry by the applicable airport authority into the Contingent Assignment of Airport Concession Agreement attached as Exhibit D or such other similar agreement previously approved by Budget in writing. Budget reserves the right to negotiate directly with some or all airport authorities in the Territory to obtain its own airport concession agreements, which it will sublease to Licensee. Licensee agrees to cooperate fully with Budget in its efforts, and to honor all of Budget's and its obligations under said Airport Concession Agreement.
- 8.3 Prior Approval of Locations. Each Location operated by Licensee will be subject to the prior written approval of Budget and will be managed by an employee of Licensee who has completed the instruction specified in Paragraph 4.1. Such approval will not constitute a representation by Budget regarding the profitability of a particular Location. Locations must adhere to the specific requirements listed in the Summary Pages (Section 4) and in accordance with the Standards. Budget will consider factors including market size, fleet requirements, proximity to airport or other commercial hub, traffic patterns and access, the availability of real estate in the given market and cost factors before declaring approval or disapproval.
- 8.4 Commencement of Operations. Licensee agrees to commence the operation of the Rental Business not later than the date specified in the Summary Pages (Section 9). Licensee will be deemed to have commenced operations of the Rental Business hereunder upon the opening of its first Location in the Territory.
8.5 Development of the Rental Business Premises.
- (a) Location of Rental Business. The Rental Business may be operated only from the Location(s) pre-approved by Budget in writing according to Paragraph 8.3 and the Summary Pages (Section 4), and may be used only for the Rental Business and no other purpose without Budget's prior written consent, except where Budget has granted Licensee the right to operate non-exclusive Rental Businesses under this Agreement. Budget is not obligated to visit any specific site before declaring approval or disapproval.
- (b) Layout and Appearance of Rental Business. Licensee will submit to Budget for Budget's written approval, plans and specifications for the layout of each proposed location of the Rental Business.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a licensee must adhere to specific requirements to protect Budget's interests regarding licenses, concession agreements, leases, and permits. Specifically, these licenses, concession agreements, leases, and permits will be deemed assigned to Budget, although Budget has the option to accept said assignment. The lessor or other party to such agreements is authorized to provide Budget with all information regarding the rental business. Budget is authorized to enter the premises after the agreement terminates to remove materials and signage containing Budget's trademarks.
Furthermore, if the licensee seeks to operate from an airport, they must obtain entry by the applicable airport authority into the Contingent Assignment of Airport Concession Agreement, as outlined in Exhibit D, or another similar agreement approved by Budget. Budget retains the right to negotiate directly with airport authorities to obtain its own airport concession agreements, which it can then sublease to the licensee. The licensee is obligated to fully cooperate with Budget in these efforts and must honor all of Budget's obligations under the Airport Concession Agreement.
In addition, the licensee cannot transfer any licenses, concession agreements, and/or permits which are required by, or related to, the Rental Business, may be voluntarily, involuntarily, directly or indirectly sold, assigned or otherwise transferred by Licensee without Budget's prior written consent. Upon termination of the License Agreement for any reason, Budget has power of attorney to transfer to Budget or its designee, all airport licenses, concession agreements, leases and permits.