Are there any circumstances under which the Budget Confidentiality Agreement would not apply?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
WHEREAS, PROSPECTIVE LICENSEE desires to evaluate the purchase of a license from BUDGET on the terms and conditions of BUDGET'S License Agreement; and
WHEREAS, in connection with this evaluation, PROSPECTIVE LICENSEE desires to review Budget's Standard Operating Manual, which may consist of several component parts ("Operating Manual"), which Operating Manual contains, and is being maintained as, confidential information and trade secrets of BUDGET; and
WHEREAS, BUDGET will permit inspection of its Operating Manual prior to the execution of a License Agreement only on the terms and conditions of this Confidentiality Agreement;
NOW, THEREFORE, in consideration of being given access to the Operating Manuals, PROSPECTIVE LICENSEE hereby agrees as follows:
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- All information contained in the Operating Manual (the "Confidential Information") shall be used by PROSPECTIVE LICENSEE solely for the purpose of evaluating whether or not to enter into a License Agreement with BUDGET, and for no other purpose.
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- PROSPECTIVE LICENSEE shall not disclose the Confidential Information to any person or entity other than Permitted Parties, as defined below.
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- Confidential Information does not include any item of information, which is either: (a) known to PROSPECTIVE LICENSEE prior to its receipt of such information from BUDGET; (b) known to the public prior to PROSPECTIVE LICENSEE'S receipt of such information from BUDGET; (c) after such receipt, becomes available to the public generally other than by contravention of this Agreement, any Permitted Party's Confidentiality Agreement, or any other duty to or agreement with BUDGET; or (d) is obtained by PROSPECTIVE LICENSEE from a source with the independent right to disclose it.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, there are specific circumstances under which the Confidentiality Agreement would not apply. The agreement does not apply to information that was already known to the prospective licensee prior to receiving it from Budget, or if the information was already public knowledge before the prospective licensee received it. Additionally, the agreement does not apply if the information becomes publicly available after the prospective licensee receives it, as long as this wasn't due to a breach of the agreement. Finally, the agreement does not apply if the prospective licensee obtains the information from another source that has the independent right to disclose it.
This means that a prospective Budget franchisee is not obligated to keep information confidential if it falls into one of these categories. It is important for the prospective franchisee to document the source and timing of any such information to demonstrate that it falls under one of these exceptions, should any dispute arise.
Budget requires prospective licensees to agree to keep Budget's Standard Operating Manual confidential while evaluating a potential franchise purchase. This protects Budget's trade secrets and proprietary information. The prospective licensee can only use the confidential information to evaluate whether to enter into a License Agreement with Budget. The prospective licensee can only disclose the confidential information to "Permitted Parties", which include officers, directors, employees, attorneys, agents, consultants, advisors, or other independent contractors of the prospective licensee who have signed a confidentiality agreement with Budget.