What sections of the Budget License Agreement outline the obligations of a Budget franchisee regarding trademarks and proprietary information?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
In paragraph 2.4 of the Budget License Agreement, you acknowledge that you have had no part in the creation or development of, no prior
knowledge of, and no proprietary or other rights or claims in or to any element of, the Rent A Car System or Budget's Proprietary Marks. You must also acknowledge that all materials loaned or otherwise made available to you and all disclosures made to you by or at the direction of Budget, and not to the general public, at any time before or during the term of your Budget License Agreement, including the contents of the Manual, are communicated and made available confidentially and as trade secrets.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 34–37)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, several sections of the Budget License Agreement address a franchisee's obligations regarding trademarks and proprietary information. Paragraph 2.4 of the Budget License Agreement requires franchisees to acknowledge they have no prior rights to the Rent A Car System or Budget's Proprietary Marks. Franchisees must also acknowledge that all materials and disclosures provided by Budget, including the contents of the Manual, are confidential and trade secrets. Item 17 outlines non-competition during the franchise term in section 1.6 and the Nondisclosure and Noncompetition Agreement, which restricts involvement in other vehicle rental businesses in the United States.
Item 17 also indicates that after the franchise is terminated or expires, sections 11.9, 12.6, and the Nondisclosure and Noncompetition Agreement impose non-competition covenants, preventing a franchisee from operating a competing business for one year within the licensed territory or within five miles of it. Furthermore, Item 17 specifies that on termination, as per section 11.6, franchisees must cease identifying themselves as a Budget Licensee or using Budget's system and return the Manual and advertising materials.
Additionally, the third sentence of Paragraph 2.2 of the License Agreement, as modified by Item 2, stipulates that Budget has the sole discretion to take action regarding any infringement, challenge, or claim relating to any Budget Trademark. Item 13 reinforces this by stating that franchisees must immediately notify Budget of any infringement or challenge to the use of Budget's Proprietary Marks. Budget retains the exclusive right to control any related litigation or administrative proceedings and may direct franchisees to modify or discontinue the use of any of Budget's Proprietary Marks.