Regarding the Budget franchise agreement addendum, what representation is made by each party executing the document?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.22 Representation.
No representations, promises, guarantees, projections, or warranties of any kind have been made by Budget to induce the execution of this Agreement or in connection with this Agreement except as specifically set forth in writing herein or contained within the Franchise Disclosure Document.
Licensee acknowledges that neither Budget nor any other party has guaranteed Licensee's success in the business contemplated by this Agreement.
14.23 Survival. All obligations of Budget and Licensee which expressly or by their nature survive the expiration or termination of this Agreement, including Licensee's obligations to pay amounts to Budget when due and Licensee's obligations under Paragraphs 2.1, 2.3, 2.4, 9.3, 11.6, 11.7, 11.8, 11.9 and Articles XIII and XIV hereof, will continue in full force and effect subsequently to and notwithstanding the expiration or termination of this Agreement and until they are satisfied in full or by their nature expire.
BUDGET RENT A CAR SYSTEM, INC.:
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, several clauses address representations made by both Budget and the franchisee (Licensee) when executing the franchise agreement and its addenda. Budget states that no representations, promises, guarantees, projections, or warranties have been made to induce the franchisee to sign the agreement, except as specifically written in the agreement or the Franchise Disclosure Document itself. This is a standard clause to prevent franchisees from later claiming they were misled by verbal promises not included in the official documents.
Budget also emphasizes that it does not guarantee the franchisee's success. This acknowledges the inherent risks of starting a business and makes it clear that Budget is not liable if the franchisee's business underperforms. The franchisee, on the other hand, acknowledges having received the required disclosure documents at least 14 calendar days before signing the agreement and a complete copy of the agreement at least seven days prior. This acknowledgement is crucial for Budget to demonstrate compliance with federal and state franchise laws, which mandate a specific review period for prospective franchisees.
However, certain states like Minnesota and Washington have specific stipulations. For instance, Minnesota law requires Budget to comply with certain notice periods for termination or non-renewal, and it prohibits Budget from enforcing certain provisions that waive franchisee rights. Similarly, in Washington, certain representations are deleted from the agreement, and franchisees are not required to sign the acknowledgement. These state-specific addenda ensure that the franchise agreement complies with local laws and provides additional protections to franchisees in those states. Prospective franchisees should carefully review these state-specific provisions to understand their rights and obligations fully.