Does a Budget licensee's failure to insist upon strict compliance with the Standards by Budget constitute a waiver by the licensee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Failure by Budget and/or the Related Entities on the one hand or Licensee on the other, to either enforce any breach or default or series of breaches or defaults in performance by the other; or to exercise any right, power or option given to Budget and/or its Related Entities on the one hand or Licensee on the other hereunder; or to insist upon strict compliance with or performance of the other party's obligations under this Agreement, the Standards (if applicable) or related agreements will not in any event constitute a waiver by Budget and/or the Related Entities on the one hand or Licensee on the other, of the provisions of this Agreement, the Standards (if applicable) or related agreements with respect to any such breach or default, or subsequent breach or default, or Budget's and/or the Related Entities' right on the one hand or Licensee's right on the other at any time thereafter to require exact and strict compliance with the provisions thereof.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, neither Budget nor the licensee's failure to enforce breaches or defaults, exercise rights, or insist on strict compliance with obligations under the agreement or standards constitutes a waiver of those provisions. This applies to both Budget and the licensee.
In practical terms, this means that if either Budget or the licensee overlooks a violation of the franchise agreement or standards at one point, it does not forfeit their right to enforce that provision in the future. For example, if Budget doesn't enforce a specific standard for a period, it can still demand strict compliance later. Similarly, if a licensee doesn't insist on Budget fulfilling a certain obligation, the licensee does not waive their right to demand that obligation be fulfilled in the future.
This clause protects both parties by ensuring that leniency or oversight in one instance does not set a precedent for future conduct. It allows for flexibility in the relationship while maintaining the enforceability of the franchise agreement and standards. Franchisees should be aware that Budget's occasional lack of enforcement does not mean that those standards are permanently waived.