Upon termination of the Budget franchise agreement due to licensee default, what services may ABCR discontinue?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
If Licensee defaults on any term or provision of this Agreement, and fails to cure said default within thirty (30) days of Licensee's receipt of a written notice of default from ABCR, Budget shall have the unqualified right, without liability of any kind, to terminate services provided hereunder and/or to terminate this Agreement, effective immediately upon expiration of the thirty (30) day cure period, without any obligation to deliver a written notice of termination to Licensee. Upon termination, ABCR may discontinue all services offered under this Agreement, including all such services directly or indirectly relating to reservations and to the Reservation System which are provided on behalf of Licensee, including, without limitation, the solicitation, reception and transmission of reservations for and on behalf of Licensee.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, if a licensee defaults on any term or provision of the agreement and fails to correct it within 30 days of receiving written notice from ABCR, Budget has the right to terminate services without any liability. Upon termination, ABCR may discontinue all services offered under the agreement.
This includes all services directly or indirectly related to reservations and the Reservation System provided on behalf of the licensee. Specifically, ABCR can cease the solicitation, reception, and transmission of reservations for the licensee. This means that a franchisee who fails to meet the obligations of their franchise agreement risks losing access to Budget's reservation system, which is critical for attracting and serving customers.
This provision highlights the importance of adhering to the terms of the franchise agreement. Failure to do so can result in the loss of essential services that support the operation of the Budget rental business. Prospective franchisees should carefully review the franchise agreement to understand their obligations and the potential consequences of default.