According to the Belocal Transfer Agreement, what is the 'Closing' defined as?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
C. Transferor desires to transfer, convey, and assign to Transferee all of its interest in and to the Franchise Agreement as provided for in this Transfer Agreement and to sell certain assets used in the operation of Franchisee's Business, as defined in that certain purchase agreement dated
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, 'Closing' refers to the effective date of the transfer of the franchise agreement and related assets. Specifically, it is defined as the date specified in the Purchase Agreement between the Transferor (seller) and Transferee (buyer) or another date mutually agreed upon by both parties. This date marks when the transfer of interest in the Franchise Agreement becomes effective.
For a prospective Belocal franchisee, understanding the 'Closing' definition is crucial because it determines when the responsibilities and rights under the franchise agreement shift from the seller to the buyer. It also dictates when the New Franchise Agreement between the Transferee and Belocal comes into effect. The franchisor's approval of the transfer is contingent upon the closing taking place as agreed.
If the closing does not occur as planned, Belocal's approval of the transfer is withdrawn, and the Transferor remains bound by the original Franchise Agreement. This highlights the importance of adhering to the agreed-upon timeline and conditions for the transfer to be successfully completed. The Transferee must also enter into a New Franchise Agreement with Belocal on or before the Closing date.