Does the Budget Rent A Car System License Agreement include a Noncompetition Agreement?

According to Budget's 2025 Franchise Disclosure Document, the Budget Rent A Car System License Agreement does include a Noncompetition Agreement. Specifically, Item 1 states that if the franchisee is a corporation, partnership, limited liability company, or other business entity, certain provisions of the Budget License Agreement will apply to the owners under the Nondisclosure and Noncompetition Agreement, which is Exhibit C to the Budget License Agreement. This agreement is in addition to the Personal Guarantee, which is Exhibit A to the Budget License Agreement.

This means that owners of a Budget franchise operated through a business entity are subject to both nondisclosure and noncompetition obligations. The Noncompetition Agreement aims to protect Budget's interests by preventing those affiliated with the franchise from engaging in competitive activities, both during the term of the franchise agreement and potentially for a period after its termination. The specifics of these restrictions, such as the duration and geographic scope, would be detailed in Exhibit C, which is the actual Noncompetition Agreement document.

Prospective franchisees should carefully review Exhibit C to fully understand the terms and limitations of the Noncompetition Agreement. It is important to understand the extent to which the agreement restricts their ability to participate in similar businesses, either during the franchise term or afterward, as this could impact their future business opportunities. Franchisees should seek legal counsel to fully understand the implications of this agreement before signing the Budget License Agreement.