For Budget locations, what is the permitted use of the Premises by the Licensee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1. Use of Premises. Licensee will use the Premises only for the operation of a Rental Business pursuant to its License Agreement and for no other purposes whatsoever.
- 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.
- (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. Upon Budget's approval, Licensee will promptly proceed to develop the Rental Business location in accordance with the Standards. No material changes will be made to the layout or appearance of any of the Rental Business during the term of this Agreement without Budget's prior written approval.
- (c) Condition of Rental Business; Hours of Operation. The Rental Business will be kept and maintained at all times in clean condition, in good order and repair and in accordance with the Standards. (d) Refurbishing and Upgrading. Subject to Paragraph 9.20 herein, Licensee agrees to refurbish and upgrade the condition of the Rental Business as may be reasonably required by Budget to maintain or improve the appearance of the Rental Business, to increase its sales potential or to comply with the Standards. Licensee agrees to display the then-current Budget logos and marks on all signage, forms, uniforms, stationery and any other items containing the Budget logos and Marks. If Budget changes the logo or trade dress, Licensee will have twenty-four (24) months to make such modifications pursuant to this paragraph.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the licensee is permitted to use the premises only for the operation of a Rental Business. This means that a franchisee's use of the location is explicitly limited to conducting the Budget rental car business as outlined in the License Agreement. Any other business activities are prohibited without prior written consent from Budget, unless Budget has granted the licensee the right to operate non-exclusive Rental Businesses under the Agreement.
Budget must pre-approve the location in writing, according to Paragraph 8.3 and the Summary Pages (Section 4). The Rental Business may be operated only from these pre-approved locations. The franchisee must also submit plans and specifications for the layout of each proposed location for Budget's written approval. Once approved, the franchisee must develop the location according to Budget's standards. No material changes to the layout or appearance are allowed without Budget's prior written approval.
Budget is not obligated to visit any specific site before declaring approval or disapproval. The franchisee is responsible for maintaining the Rental Business in a clean condition, in good order and repair, and in accordance with Budget's standards. Additionally, the franchisee must refurbish and upgrade the condition of the Rental Business as reasonably required by Budget to maintain or improve its appearance, increase its sales potential, or comply with the Standards. The franchisee is also required to display the then-current Budget logos and marks on all signage, forms, uniforms, stationery, and any other items containing the Budget logos and Marks. If Budget changes the logo or trade dress, the franchisee has twenty-four (24) months to make such modifications.
This tight control over the use and appearance of the premises is typical in franchising, as it helps to maintain brand consistency and protect the brand's image. Prospective franchisees should carefully review Budget's standards and requirements for location development and maintenance to ensure they are willing and able to comply.