Under the License Agreement, what will the Licensee assign to Budget in the event of termination or default under the Concession for a Budget franchise?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Concessionaire hereby acknowledges that Licensee has agreed under the License Agreement that, in the event of termination, for any reason, or Licensee's default under the Concession, Licensee will, at Budget's option, assign to Budget or Budget's designee any and all interest of Licensee in the Concession, including any rights to renew the Concession or to sublease the Premises; and Concessionaire hereby consents to such assignment, subject to the following conditions:
(i) Budget will notify Concessionaire in writing within thirty (30) days after termination or expiration of the License Agreement or Budget's receipt of any notice of default by Licensee under the Concession if Budget elects to accept assignment of the Concession; Budget's failure to accept assignment of the Concession upon any default of Licensee under the Concession, will not be deemed a waiver of Budget's future right to accept such assignment in the event of any future default of Licensee;
(j) If Budget elects to accept assignment of the Concession, Budget will execute and deliver to Concessionaire a concession containing the same terms and conditions (including concession fees) as the Concession; provided, however, that Budget's concession interest will not be subject to any defaults or claims that may then exist between Concessionaire and Licensee;
(k) If Budget elects to accept assignment of the Concession, Budget will take possession of the Premises within thirty (30) days after notice of such election to Concessionaire;
(l) Nothing herein will affect Concessionaire's right to recover from Licensee any and all amounts due under the Concession or to exercise any rights of Concessionaire against Licensee as provided under the Concession, nor will Budget be responsible for Licensee's default under the Concession.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, in the event of termination or default under the Concession, the Licensee will assign to Budget any and all interest in the Concession. This assignment is at Budget's option. This includes any rights to renew the Concession or to sublease the Premises.
Budget must notify the Concessionaire in writing within thirty days of the termination or expiration of the License Agreement, or upon receiving notice of default by the Licensee, if it elects to accept the assignment of the Concession. If Budget fails to accept the assignment upon the Licensee's default, it does not waive Budget's future right to accept such an assignment in the event of any future default by the Licensee.
If Budget chooses to accept the assignment, it will execute and deliver to the Concessionaire a concession containing the same terms and conditions, including concession fees, as the original Concession. However, Budget's concession interest will not be subject to any defaults or claims that may exist between the Concessionaire and the Licensee. Budget will take possession of the Premises within thirty days after notifying the Concessionaire of its election to accept the assignment. The agreement clarifies that the Concessionaire retains the right to recover any amounts due from the Licensee under the Concession and can exercise its rights against the Licensee as provided in the Concession. Budget is not responsible for the Licensee's default under the Concession.
Budget retains the right to assign its concession or sublease the Premises to a third party after giving notice of its election to accept the assignment. The Concessionaire agrees not to unreasonably withhold consent to any such assignment or sublease on the same terms as the Concession. However, if the Concessionaire refuses to consent to the assignment or sublease by Budget, Budget has the right to revoke its acceptance of the assignment and will have no further obligations under it.