Are all shareholders of a Budget franchisee required to personally guarantee payments due to Budget under the License Agreement?

According to the 2025 Budget Franchise Disclosure Document, whether all shareholders of a Budget franchisee are required to personally guarantee payments due to Budget under the License Agreement is not explicitly stated. However, the FDD does state that Budget expects the franchisee to finance 100% of their vehicle fleet and that the franchisee must provide security for any loan obtained and personally guarantee any financing. This guarantee will place the franchisee's personal assets at risk if the franchise fails.

This requirement for a personal guarantee on vehicle financing is a significant consideration for prospective Budget franchisees. It means that the franchisee's personal assets, such as their home, could be at risk if the business does not perform well and they are unable to meet their financial obligations. This is a common practice in many franchise systems, as it provides the franchisor with additional security and demonstrates the franchisee's commitment to the business.

Because the FDD excerpt only mentions the franchisee's personal guarantee related to vehicle financing, it remains unclear if this extends to all shareholders or if it applies to other payments due to Budget under the License Agreement. A prospective franchisee should seek clarification from Budget regarding the specific circumstances under which personal guarantees are required and who is obligated to provide them.