Under what conditions can ABCR modify or replace the System without liability to the Budget licensee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- ABCR will have the exclusive right, in its sole discretion, at any time, or from time to time, without any liability to Licensee therefor, (i) to modify, amend, replace, sell, lease or otherwise dispose of the System; and (ii) to make other arrangements with any third party to provide installation, maintenance, communications or other services covering all users of the System in replacement for or in addition to any such services contemplated hereunder (but without prejudice to ABCR's continuing obligation to perform this Agreement).
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- EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, ABCR PROVIDES THE SYSTEM "AS IS" AND "AS AVAILABLE" WITHOUT ANY WARRANTY OR CONDITION OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, USAGE OF TRADE, OR COURSE OF DEALING. ABCR DOES NOT GUARANTEE CONTINUOUS OR UNINTERRUPTED ACCESS TO THE SYSTEM OR THAT THE SAME WILL BE COMPLETELY SECURE OR ERROR FREE. OPERATION OF THE SYSTEM MAY BE INTERFERED BY NUMEROUS FACTORS OUTSIDE OF ABCR'S CONTROL. ABCR DOES NOT WARRANT THE ACCURACY OR RELIABILITY OF THE RESULTS OBTAINED THROUGH USE OF THE SYSTEM OR ANY DATA OR INFORMATION OBTAINED OR ACQUIRED THROUGH THE USE OF THE SYSTEM.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, ABCR (presumably the parent company or a related entity) has the exclusive right to modify, amend, replace, sell, lease, or dispose of the System at any time, or from time to time, without incurring any liability to the Budget licensee. This means Budget franchisees must adapt to changes in the operating system. ABCR can also make arrangements with third parties to provide installation, maintenance, communications, or other services for all users of the System, either as a replacement or in addition to existing services, without affecting ABCR's obligation to perform the agreement.
This broad right gives ABCR significant control over the technology and systems used within the Budget franchise network. While ABCR is obligated to continue performing under the franchise agreement, franchisees have no recourse if ABCR modifies or replaces the system, even if those changes negatively impact their operations. This could include changes to software, hardware, or communication systems.
The FDD also states that the system is provided "AS IS" and "AS AVAILABLE" without any warranty. ABCR does not guarantee uninterrupted access, security, or error-free operation of the system. Franchisees acknowledge that numerous factors outside of ABCR's control may interfere with the system's operation, and ABCR does not warrant the accuracy or reliability of results obtained through its use. This lack of warranty and the broad right to modify the system place a significant risk on the franchisee, who must rely on ABCR to maintain a functional system without any guarantees.
Prospective Budget franchisees should carefully consider the implications of these provisions. It is essential to understand that ABCR has the power to make changes to the system without liability, and the franchisee bears the risk of those changes. Due diligence should include asking existing franchisees about their experiences with system changes and the impact on their businesses. Additionally, prospective franchisees may want to inquire about ABCR's long-term technology roadmap and planned system upgrades to better assess the potential for future disruptions.