What does Maryland law state regarding franchise agreements for Budget, specifically concerning choice of law, jurisdiction, and venue?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
tal System Agreement,** and Confidentiality Agreement in Item 17(w) are deleted and replaced with the following:
"Illinois law applies."
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- There is extensive litigation involving Avis/Budget disclosed in Item 3 of the disclosure document. Make certain to review Item 3 in the disclosure document, along with the document attached as Exhibit B, Laws & Regulations Concerning the Car Rental Industry and the Announcement of the Department of Justice – Settlement Agreement.
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- Budget expects that YOU will finance 100% of your vehicle fleet. YOU must provide security for any loan you obtain and personally guarantee any financing. This Guarantee will place your personal assets (perhaps including your house) at risk if your franchise fails.
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- Item 6 in the disclosure document contains 7 plus pages of "Additional Fees" that YOU MUST PAY throughout the term of the franchise.
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- No statement, questionnaire or acknowledgement signed or agreed to by a franchisee in connection with the commencement of the franchise relationship shall have the effect of: (i) waiving any claims under any applicable state franchise law, including fraud in the inducement, or (ii) disclaiming reliance on behalf of the Franchisor. This provision supersedes any other term of any document executed in connection with the franchise.
MARYLAND
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- The following language is added to the "Summary" section of Item 17(c), entitled Requirements for you to renew or extend, and Item 17(m), entitled Conditions for Budget's approval of transfer, in the Budget License Agreement chart of Item 17:
- "Any release required as a condition of renewal and/or assignment/transfer will not apply to the extent prohibited by the Maryland Franchise Registration and Disclosure Law."
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Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Maryland law provides specific protections for franchisees regarding choice of law, jurisdiction, and venue. For claims arising under the Maryland Franchise Registration and Disclosure Law, a Budget franchisee may bring a lawsuit in Maryland, regardless of what the franchise agreement states about choice of forum. This ensures that franchisees are not forced to litigate disputes in a distant or inconvenient jurisdiction.
Additionally, any release required as a condition of renewal or transfer of the Budget franchise will not apply to the extent prohibited by the Maryland Franchise Registration and Disclosure Law. This prevents Budget from requiring franchisees to waive their rights under Maryland law as a condition of renewing their franchise agreement or transferring it to another party.
Furthermore, the franchise agreement specifies that, except for claims arising under the Maryland Franchise Registration and Disclosure Law, Budget may institute legal action against the franchisee in any state or federal court of competent jurisdiction in New Jersey. The franchisee irrevocably submits to the jurisdiction of those courts and waives any objection to the jurisdiction or venue of such court. However, Maryland law allows the franchisee to bring certain claims arising out of the Maryland Franchise Registration and Disclosure Law in Maryland.