What sections of the Budget License Agreement address the Personal Guarantee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| OBLIGATION | SECTION IN AGREEMENT | ITEM IN DISCLOSURE DOCUMENT |
|---|---|---|
| z. Personal Guarantee | 12.7 and Exhibit A of the Budget License Agreement were intentionally deleted | Items 1, 7, 15 |
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 37–61)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the personal guarantee is addressed in section 12.7 and Exhibit A of the Budget License Agreement. However, the document states that these sections were intentionally deleted.
This indicates that Budget may not require a personal guarantee as part of their franchise agreement. A personal guarantee typically makes the franchisee personally liable for the business's debts and obligations. The absence of this requirement could be seen as a benefit for franchisees, as it limits their personal financial risk.
Prospective franchisees should confirm with Budget whether a personal guarantee is required at any point during the franchise term, or under specific circumstances. It would be prudent to seek legal counsel to fully understand the implications of this aspect of the franchise agreement.