What is the purpose of Exhibit K in the Budget Rent A Car System, Inc. Franchise Disclosure Document?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
I have received a disclosure document issued on April 30, 2025 and effective in the franchise registration states on the dates listed in Exhibit A. This disclosure document included the following Exhibits:
- A State Agencies/Agents for Service of Process/State Effective Dates
- B Laws and Regulations Concerning the Car Rental Industry (Including Disclosures Regarding Americans with Disabilities Act)
- C FTC Consent Orders
- D Confidentiality Agreement
- E List of Franchisees
- F List of Former Franchisees and Franchisees Who Have Not Been in Communication with Budget
- G Financial Statements of Avis Budget Group, Inc.
- H Budget Rent A Car System License Agreement, including Nondisclosure and Noncompetition Agreement
- H-1 SBA Addendum
- H-2 General Release
- I Rental System Agreement
- J Intercity Rules and Regulations
- K State-Specific Additional Disclosures and Riders
- L Table of Contents of Manual
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Exhibit K provides state-specific additional disclosures and riders. These disclosures are required by various state franchise laws and apply only if the jurisdictional requirements of the applicable state franchise registration and disclosure law are met independently, without relying on these additional disclosures.
For prospective Budget franchisees, this means that Exhibit K contains crucial information that supplements the standard franchise agreement to comply with specific state regulations. The exhibit ensures that Budget adheres to the franchise laws of each state in which it operates, offering franchisees additional protections and disclosures as mandated by those states.
For example, the FDD excerpt includes specific additional disclosures for California, such as stipulations that no agreement can waive claims under state franchise law or disclaim reliance on franchisor statements. It also adds information to Item 3 regarding orders of national securities associations and exchanges. Furthermore, California law requires that all proposed agreements related to the sale of the franchise be delivered with the disclosure document. These provisions are designed to protect the franchisee's rights and ensure transparency in the franchise relationship within California.
Therefore, it is essential for potential Budget franchisees to carefully review Exhibit K to understand the specific legal requirements and protections applicable in their state. This exhibit tailors the franchise agreement to local laws, providing franchisees with a clear understanding of their rights and obligations under the franchise agreement within their specific jurisdiction.