Does Budget require franchisees to provide security for loans and personally guarantee financing, potentially placing personal assets at risk?

According to Budget's 2025 Franchise Disclosure Document, franchisees are expected to finance 100% of their vehicle fleet. As a condition of obtaining financing, Budget requires franchisees to provide security for any loan they obtain and to personally guarantee the financing. This guarantee places the franchisee's personal assets, potentially including their house, at risk if the franchise fails. This is a significant financial risk for franchisees, as their personal assets could be at stake if the business does not succeed.

This requirement is highlighted specifically for franchisees operating in Illinois. The FDD emphasizes that franchisees 'YOU MUST' provide security and personally guarantee financing. This underscores the importance of carefully considering the financial implications and risks associated with this requirement before investing in a Budget franchise.

Prospective franchisees should carefully evaluate their financial situation and risk tolerance before committing to a Budget franchise. They should also seek professional financial and legal advice to fully understand the implications of providing personal guarantees and security for loans. Understanding the terms of the guarantee and the potential impact on personal assets is crucial for making an informed decision.