Under what circumstances is the Rider related to the Rental System Agreement signed for a Budget franchise?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| This Rider is made and entered into as of the day of , 20 by |
|---|
| and between Avis Budget Car Rental, LLC. (hereinafter referred to as "Avis Budget Car |
| Rental") and d/b/a Budget Rent A Car of |
| ("Licensee"). |
| 1. |
| Background. Avis Budget Car Rental and Licensee are parties to that certain |
| Rental |
| System |
| Agreement |
| dated |
| , |
| 20 |
| (the |
| "Rental |
| System |
| Agreement") that has been executed concurrently with the execution of this Rider. This Rider is |
| annexed to and forms part of the Rental System Agreement. This Rider is being executed because |
| (a) Licensee is a resident of the State of Illinois, and/or (b) the Budget Franchise that Licensee will |
| operate under the License Agreement with Budget Rent a Car System, Inc. (pursuant to which the |
| parties are signing the Rental System Agreement) will be located within the State of Illinois and |
| the offering or sales activity with respect to that License Agreement occurred or will occur in |
| the State of Illinois. Each provision of this Rider shall be effective only to the extent, with respect |
| to such provision, that the jurisdictional requirements of the Illinois Franchise Disclosure Act are |
| met independently without reference to this Rider. |
| 2. |
| Applicable Law. Section XII, Paragraph 5(a) of the Rental System Agreement is |
| deleted in its entirety and the following is substituted in its place: |
| "This Agreement will be governed by and construed under and in accordance |
| with the laws of the State of Illinois without giving effect to its conflicts rules." |
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, a Rider to the Rental System Agreement is required under specific circumstances related to the franchisee's location or activities within certain states. Specifically, the Rider is signed if the Budget franchise will operate in Illinois, the franchisee is a resident of Illinois, or any franchise-related activities occurred or will occur in Illinois. The Rider is also required if the franchise will operate in New York, or the franchisee is a resident of New York, or any franchise-related activities occurred in New York.
The Rider is annexed to and forms part of the Rental System Agreement, indicating its integral role in the overall franchise agreement. The document clarifies that each provision within the Rider is only effective if the jurisdictional requirements of the relevant state's franchise disclosure laws (Illinois or New York) are independently met, without relying on the Rider itself. This suggests that the Rider serves to ensure compliance with state-specific franchise regulations.
For prospective Budget franchisees, this means that the requirement for a Rider to the Rental System Agreement depends on the state in which they reside and where their franchise will operate. It is important to understand the specific jurisdictional requirements of these states to ensure full compliance with franchise laws. The Rider modifies specific aspects of the Rental System Agreement to align with state laws, as seen in the example for Illinois, where a section of the agreement is replaced to specify that Illinois law governs the agreement.