Under the Budget franchise agreement, which documents outline the franchisee's responsibilities regarding compliance with standards and policies?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
This table lists certain important provisions of the Budget License Agreement and related agreements. You should read these provisions in the agreements attached to this disclosure document.
THE FRANCHISE RELATIONSHIP
I. THE BUDGET LICENSE AGREEMENT
| Provision | Section of the Budget License Agreement | Summary | |
|---|---|---|---|
| q. Non-competition during the term of the franchise | 1.6 and Nondisclosure and Noncompetition Agreement | No involvement in other vehicle rental business or system in the United States. | |
| r. Non-competition covenants after the franchise is terminated or expires | 11.9, 12.6, and Nondisclosure and Noncompetition Agreement | No competing business for one year in licensed territory or within five miles of licensed territory. | |
| s. Modification of the agreement | 14.2(c) | Must be reduced to writing and signed by you and Budget. However, the Manual and Standards are subject to change. | |
| t. Integration/merger clause | 14.2(a) | Only terms of license agreement, its exhibits, its schedules, the Standards and Transfer Requirements are enforceable. Any representations or promises outside of the disclosure document and license agreement may not be enforceable. Notwithstanding the foregoing, nothing in this or any related agreement is intended to disclaim the express representations made in the Franchise Disclosure Document, its exhibits and amendments. | |
| u. Dispute resolution by | None | ||
| arbitration or mediation | |||
| v. Choice of forum | 14.9 | Subject to state law, you agree to the jurisdiction of New Jersey courts. | |
| w. Choice of law | 14.8 | Subject to state law, New Jersey law applies. | |
| Provision | Section of the Budget License Agreement | ||
| f. | Termination by Budget with cause | 11.3, 11.4, and 11.11 | |
| g. | "Cause" defined— defaults which can be cured | 11.3 | |
| h. | "Cause" defined— defaults which cannot be cured | 11.4 | |
| Provision | Section of the Budget License Agreement | Summary | |
| ---- | ---------------------------------------------------- | ------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| i. | Your obligations on termination | 11.6 | Pay fees and other amounts owed to Budget, its affiliates, and third parties; not identify yourself as a Budget Licensee or use Budget's system; return Manual, Standard Rental Agreements, advertising materials, and anything bearing the "Budget" name to Budget; transfer telephone numbers, facsimile and electronic communication lines, and electronic addresses and domain names used by it to conduct the RAC business to Budget or its designee; effectuate the sale, transfer, or assignment of airport licenses, concession agreements, and permits to Budget or its designee and, at Budget's option, any real estate agreements; cancel any assumed name or equivalent registration containing "Budget" name; cancel website promoting the RAC business, take all steps necessary to transfer to Budget all existing reservations and open rental agreements, take all steps to properly secure and or destroy customer PII (as defined in Section 9.10) in accordance with applicable laws, and in accordance with Budget's data retention policies (which are applicable to any data obtained through Budget), and promptly remove and destroy all Budget signage. |
| j. | Assignment of contract by Budget | 12.1 | No restrictions on Budget's right to assign. |
| k. | "Transfer" by you— definition | 12.2(b) | Transfer of the license or any assets, or ownership changes of 25% or more through a stock sale, assignment, asset purchase, transfer, offering, or otherwise, requires Budget's prior written consent. |
| l. | Budget's approval of transfer by you | 12.2(a) | Budget must approve all proposed transfers in writing. No transfers without Budget's approval. |
| m. |
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 34–37)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, the documents outlining a franchisee's responsibilities regarding compliance with standards and policies are the Budget License Agreement and the Manual and Standards. Section 14.2(c) of the Budget License Agreement states that the Manual and Standards are subject to change. Section 14.2(a) indicates that the terms of the license agreement, its exhibits, its schedules, the Standards, and Transfer Requirements are enforceable.
Specifically, Item 17 details various aspects of the Budget License Agreement. Section 11.3 and 11.4 define 'cause' for termination, which includes defaults that can and cannot be cured. Section 11.6 outlines the franchisee's obligations upon termination, such as paying fees, ceasing to identify as a Budget licensee, returning materials, and transferring telephone numbers and electronic communication lines.
Additionally, Section 12.2(a) and (c) along with Exhibit G (Transfer Requirements) specify the conditions for Budget's approval of a transfer, emphasizing adherence to system standards. These standards include operating the Budget business using Wizard, maintaining current trade dress and facility standards, and following Budget's programs regarding National Accounts corporate accounts and the form of rental agreement. Therefore, franchisees must adhere to these documents to maintain compliance and avoid potential issues such as termination or transfer disapproval.