What is the procedure for a Budget franchisee to obtain approval for their initial location?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
You must obtain Budget's prior written consent for your initial location, any change in your location, or construction of additional facilities (see Item 11).
Budget grants licenses to operate a Budget Franchise to persons with the ability to operate and promote a Budget Franchise in a particular geographic territory. Budget will assign you a territory in which to operate under the Budget License Agreement and in which you choose your business locations, subject to Budget's approval (see Item 11) Because the size of the licensed territory depends on factors like population, the presence or absence of an airport, and your operational abilities and experience, it is not possible to specify the minimum area granted to a Budget Franchise. The territory is usually described by political boundaries (for example, part of a city or county), but in certain areas might be a circle with your location at the center. Budget may use accepted industry parameters, census tracts, population densities, zip code boundaries, buying patterns, traffic counts, and projected commercial and residential growth to determine the territory's boundaries. However, a territory will not usually include a population of less than 25,000 people.
You will not receive an exclusive territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
Budget reserves all rights not expressly granted to you under your Budget License Agreement, including the rights of Budget and its affiliates to: (1) operate, and grant others the right to operate Budget Franchises outside your licensed territory and, under certain circumstances (for National Accounts or if you fail to comply with the Budget License Agreement, as described below), inside the licensed territory, on any terms and conditions Budget deems appropriate
Source: Item 12 — TERRITORY (FDD pages 61–63)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a franchisee must obtain Budget's prior written consent for their initial location. This requirement is also in place for any changes to the location or construction of additional facilities. Item 11 of the FDD likely contains further details about this process.
Budget grants licenses to operate a Budget Franchise in a particular geographic territory. Franchisees choose their business locations, but these are subject to Budget's approval. The size of the licensed territory depends on factors such as population, the presence of an airport, and the franchisee's operational abilities and experience. The territory is usually defined by political boundaries, such as part of a city or county, but in some areas, it might be a circle with the franchisee's location at the center. While Budget uses various parameters to determine the territory's boundaries, it will not usually include a population of less than 25,000 people.
It's important to note that franchisees will not receive an exclusive territory and may face competition from other franchisees, company-owned outlets, or other channels of distribution or competitive brands that Budget controls. Budget also reserves the right to operate or grant others the right to operate Budget Franchises outside the franchisee's licensed territory and, under certain circumstances, inside the licensed territory. This can occur for National Accounts or if the franchisee fails to comply with the Budget License Agreement.