What is the required action for a transferee to whom a Budget Licensee assigns the agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
vices in the converted market(s), and Budget or any of its Related Entities may in its sole discretion, own and operate, or license others to establish, new locations and/or offer such services, including through Rental Businesses in the converted territory or converted market.
11.12 Budget Truck Business. Licensee agrees that it has no rights under this Agreement to rent or lease any motor vehicles that are designed, used or maintained for the transportation of property or goods (collectively defined as "Trucks"). Budget has the right to conduct its Truck business, at its sole discretion, inside the Territory.
SALE, ASSIGNMENT, AND TRANSFER
12.1 By Budget. This Agreement will be fully transferable and assignable by Budget and will inure to the benefit of any assignee, transferee or other legal successor to the interest of Budget herein.
12.2 By Licensee.
- (a) By Licensee. Licensee agrees that this Agreement is personal to Licensee and Licensee hereby acknowledges the personal confidence Budget has in Licensee and/or the beneficial owners of Licensee as identified in Paragraph 12.5 and the Summary Pages (Section 6). Neither this Agreement, the beneficial ownership of Licensee or the Rental Business (or any material assets relating to the Rental Business), or any licenses, concession agreements and/or permits which are required by, or related to, the Rental Business, may be voluntarily, involuntarily, directly or indirectly sold, assigned or otherwise transferred by Licensee (including by will, declaration of or transfer in trust or the laws of intestate succession or by operation of law through a divorce or other legal proceeding), without the prior written consent of Budget, which will not be unreasonably withheld in accordance with this Agreement and the transfer requirements prescribed by Budget from time to time, including payment of a transfer fee (see the "Transfer Requirements" contained in Exhibit F) and Licensee's execution of a general release of claims in a form satisfactory to Budget, except that such general release will exclude then- existing litigation between Licensee and Budget or the Related Entities and then-existing claims of Licensee against Budget or the Related Entities in the ordinary course of business under this Agreement or any other agreement between such parties, which litigation and claims will be identified in such release. Any such attempted or purported sale, assignment or transfer contrary to the terms and conditions of this Agreement or the Transfer Requirements will constitute a breach hereof and be void.
- (b) Meaning of Assignment or Transfer Requiring Approval. Sale, assignment or transfer of Licensee, the Rental Business, or the beneficial ownership of Licensee requiring the consent of Budget will include: (i) a sale, assignment or transfer, or cumulative sales, assignments or transfers, lifetime and testamentary, at any time during the term of this Agreement, of twenty-five percent (25%) or more of the equity ownership, or a lesser percentage if such transfer would change the voting control of Licensee or the Rental Business, whether in the form of common or preferred stock or any security convertible thereto or partnership or proprietorship interest; provided that, notwithstanding anything in this Agreement to the contrary, dispositions by a beneficial owner by will or intestacy or by gifts, sales or otherwise to the spouse or children of such beneficial owner or to other then-current beneficial owners of Licensee or their respective spouses or children (a "Permitted Transferee") will not be deemed
a sale, assignment or transfer giving rise to Budget's need to consent thereto so long as Licensee gives prior written notice of any such disposition to Budget.
(c) Notice of Any Sale, Assignment, or Transfer.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a Budget Licensee cannot transfer their License Agreement without prior written consent from Budget. This consent will not be unreasonably withheld, but the licensee must adhere to Budget's transfer requirements, including paying a transfer fee as detailed in Exhibit F and executing a general release of claims in a form satisfactory to Budget. The general release of claims excludes then-existing litigation between the Licensee and Budget or related entities, and then-existing claims of the Licensee against Budget or related entities in the ordinary course of business under the License Agreement. Any attempt to transfer the agreement without meeting these conditions will be considered a breach of the agreement and will be void.
Budget's transfer requirements are in place to ensure the quality of service, operational uniformity, integrity, and continued success of the Budget network. Budget assesses whether the potential transferee meets the financial, managerial, and operational standards that Budget periodically implements for the network. This assessment is a managerial judgment based on the licensor-licensee relationship and the long-range needs and continued success of the network.
To initiate a transfer, the transferring licensee must execute and comply with all terms of Budget's Conditional Consent Letter. They must also pay all amounts due to Budget, other members of the network, and other creditors for products, services, or other obligations related to the Rental Business as of the closing date of the transfer. The transferring licensee is responsible for providing all final documentation, such as corporate resolutions and lease and airport concession agreement assignments and consents, to Budget. They are also responsible for facilitating communication between Budget, the proposed transferee, and themselves; brokers should not contact Budget directly.
The transferring licensee must pay a transfer fee of $2,500.00, potentially adjusted for CPI-U, when requesting Budget to review a proposed transfer. Additionally, the transferring licensee is responsible for any out-of-pocket expenses incurred by Budget during the transfer review and approval process, up to a maximum of $7,500.00. These expenses are paid upon the conclusion of the transfer. The transfer fee is refunded if the transfer does not proceed due to Budget's refusal to approve it.