Under what sections of the Budget License Agreement can Budget terminate the agreement with cause?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 66–70)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget can terminate the License Agreement with cause under sections 11.3, 11.4, and 11.11. Section 11.3 defines defaults that can be cured, while section 11.4 outlines defaults that cannot be cured. These sections likely contain specific instances or breaches of contract that would allow Budget to terminate the agreement if the franchisee fails to meet the outlined standards or requirements.
For a prospective Budget franchisee, understanding the specific defaults listed in sections 11.3 and 11.4 is crucial. Knowing what actions or failures could lead to termination allows the franchisee to proactively manage their business and avoid potential breaches of contract. It is important to carefully review these sections with legal counsel to fully grasp the implications and obligations.
Section 11.11 is also listed as a cause for termination. The FDD does not provide a summary of this section, so a prospective franchisee should ask Budget for more information about what this section covers. Understanding all three sections (11.3, 11.4, and 11.11) is essential for a franchisee to protect their investment and maintain a successful business relationship with Budget.