Can Budget unilaterally waive an obligation of the Budget licensee?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.6 Waiver.
Budget and Licensee may by written instrument unilaterally waive or reduce any obligation of or restriction upon the other under this Agreement, effective upon delivery of written notice to the other or any other effective date stated in the notice of waiver.
Any waiver a party hereto grants will be without prejudice to any other rights it may have, will be subject to its continuing review and may be revoked, in its sole discretion, at any time and for any reason, effective upon delivery to the other party hereto of ten (10) days' prior written notice.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget can unilaterally waive or reduce any obligation or restriction upon the licensee under the agreement. This waiver must be in writing and becomes effective upon delivery of written notice to the licensee or on any other effective date stated in the notice.
However, any waiver granted by Budget is not absolute. The waiver is subject to Budget's continuing review and can be revoked at any time, for any reason, at Budget's sole discretion. This revocation becomes effective upon delivery of ten days' prior written notice to the licensee.
This clause provides Budget with flexibility in managing the franchise relationship, but it also introduces an element of uncertainty for the franchisee. While a waiver might offer temporary relief from certain obligations, the franchisee must be aware that Budget can revoke the waiver with only ten days' notice. This could impact the franchisee's business planning and operations, as they need to be prepared to resume the waived obligations on short notice. Franchisees should seek clarification and examples from Budget regarding situations where such waivers have been granted and subsequently revoked to fully understand the potential implications.