In what state can Budget institute legal action against a licensee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee agrees that Budget may institute any action against Licensee in any state or federal court of competent jurisdiction in the State of New Jersey and Licensee
irrevocably submits to the jurisdiction of such courts and waives any objection it may have to either the jurisdiction or venue of such court.
However, for certain claims arising out of the Maryland Franchise Registration and Disclosure Law, Maryland law provides that Licensee may bring an action in Maryland.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget may institute legal action against a licensee in the state of New Jersey. The document specifies that licensees agree to allow Budget to bring action against them in any state or federal court with jurisdiction in New Jersey. Licensees also irrevocably submit to the jurisdiction of those courts and waive any objections to the jurisdiction or venue.
However, there is an exception for claims arising under the Maryland Franchise Registration and Disclosure Law. For these specific claims, Maryland law dictates that a licensee may bring an action in Maryland. This means that while Budget generally prefers New Jersey courts, franchisees may have the right to pursue certain legal actions in their home state of Maryland under specific circumstances.
For prospective Budget franchisees, this clause highlights the importance of understanding the legal implications of the franchise agreement. While New Jersey law generally governs legal disputes, franchisees should be aware of exceptions like the Maryland Franchise Registration and Disclosure Law, which could allow for legal action in their own state. Franchisees should seek legal counsel to fully understand their rights and obligations under the agreement, particularly concerning jurisdiction and venue for potential legal disputes.