Under what circumstances is the Rider to the Rental System Agreement required for a Budget franchisee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
e extent prohibited by Section 705/41 of the Illinois Franchise Disclosure Act of 1987 which provides that "Any condition, stipulation, or provision purporting to bind any person acquiring any franchise to waive compliance with any provision of this Act or any other law of this State is void. This Section shall not prevent any person from entering into a settlement agreement or executing a general release regarding a potential or actual lawsuit filed under any of the provisions of this Act, nor shall it prevent the arbitration of any claim pursuant to the provisions of Title 9 of the United States Code" or Illinois Regulations at Section 200.609."
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- There is extensive litigation involving Budget disclosed in Item 3 of the disclosure document. Make certain to review Item 3 in the disclosure document, along with the document attached as Exhibit B, Laws & Regulations Concerning the Car Rental Industry and the Announcement of the Department of Justice – Settlement Agreement.
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- Budget expected that YOU will finance 100% of your vehicle fleet. YOU must provide security for any loan you obtain and personally guarantee any financing. This Guarantee will place your personal assets (perhaps including your house) at risk if your franchise fails.
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- Item 6 in the disclosure document contains 7 plus pages of "Additional Fees" that YOU MUST PAY throughout the term of the franchise.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this Rider on the day and year first above written.
BUDGET RENT A CAR SYSTEM, INC.
| By: Print/Type Name: Its: | ||
|---|---|---|
| ATTEST: | ||
| By: | ||
| Print/Type Name: | ||
| Its: | LICENSEE: By: Print/Type Name: Its: |
RIDER TO BUDGET RENT A CAR SYSTEM RENTAL SYSTEM AGREEMENT REQUIRED BY THE STATE OF ILLINOIS
| 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. |
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 residency. If a Budget franchisee will operate in the State of Illinois, or if the offering or sales activity occurred or will occur in Illinois, a Rider to the Rental System Agreement is required. In this case, the Rider ensures that the jurisdictional requirements of the Illinois Franchise Disclosure Act are met independently, without relying on the Rider itself.
Similarly, a Rider is required if the Budget franchise will be located within the State of New York, or if the franchisee is a resident of New York, and/or if any of the offering or sales activity related to the License Agreement occurred in New York. As with Illinois, the Rider ensures that the jurisdictional requirements of New York franchise disclosure law are met independently, without reference to the Rider.
In both instances, the Rider is annexed to and forms part of the Rental System Agreement, indicating its integral role in the overall franchise agreement when these specific conditions are met. The document also specifies that each provision of the Rider is effective only to the extent that the jurisdictional requirements are met independently, highlighting the importance of adhering to state-specific franchise laws.