Under what circumstances can ABCR assign the Budget agreement?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
ABCR may assign this Agreement to, and its obligations hereunder may be performed by, any subsidiary, affiliate or third party who owns or manages the System. Neither this Agreement, nor any rights of Licensee herein, may be assigned, transferred or otherwise conveyed by Licensee without the prior written consent of ABCR, except that this Agreement may be assigned to any person who will have succeeded to the interest of Licensee in the License Agreement in accordance with the terms thereof, provided that the transferee first agrees in writing to be bound by the terms of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, ABCR (presumably referring to the Budget System) has the right to assign the agreement to a subsidiary, affiliate, or any third party that owns or manages the Budget system. This means that the operational responsibilities and rights of ABCR under the agreement can be transferred to another entity within the Budget organization or an external party managing the franchise network.
However, the franchisee's ability to assign their rights is restricted. The franchisee cannot assign, transfer, or convey the agreement without prior written consent from ABCR. There is an exception: the agreement can be assigned to someone who succeeds to the franchisee's interest in the License Agreement, provided the new party agrees in writing to be bound by the agreement's terms. This condition ensures that any new franchisee taking over an existing location is legally obligated to adhere to the original franchise terms.
This clause protects Budget by allowing it to maintain control over who operates franchises within its system. By requiring consent for assignment, Budget can vet potential new franchisees to ensure they meet the brand's standards and have the financial and operational capabilities to succeed. The exception for successors to the License Agreement provides a mechanism for transferring ownership in certain circumstances, but still requires the new owner to formally agree to the existing terms, safeguarding Budget's interests.