factual

What actions are Belocal franchisees required to take during the wind-down period?

Belocal Franchise · 2025 FDD

Answer from 2025 FDD Document

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11. OBLIGATIONS OF FRANCHISEE PRIOR TO OR UPON EXPIRATION OR TERMINATION

  • A. Prior to the closing of a transfer of the Franchised Business or expiration of this Agreement, Franchisee shall comply with Franchisor's instructions regarding the wind-down of Franchisee's operations, comply with the wind-down procedures in the Franchise Brand Standards Manual, and cooperate in good faith with Franchisor, its affiliates, and their representatives during the wind-down period, including meeting digitally or in-person if requested. For the avoidance of doubt, Franchisee has an obligation to continue to operate the Franchised Business until the closing of the transfer or the expiration date. If Franchisee abandons the Franchised Business prior to the closing of the transfer or the expiration date or fails to comply with the wind-down procedures in the Franchise Brand Standards Manual, Franchisee shall be in default under this Agreement and Franchisor may charge the Wind-Down Damages. Franchisee shall pay all costs, expenses and attorneys' fees incurred by Franchisor in enforcing the terms and conditions of this provision. Nothing contained herein shall be construed as prohibiting Franchisor from additionally pursuing any other remedies which may be available to Franchisor for a breach.
  • B. Upon the expiration or termination of this Agreement (including termination following transfer, if applicable), all rights granted to Franchisee hereunder shall immediately terminate, and Franchisee and its Principals must:

  • (1) Immediately cease to conduct operations of the Franchised Business and cease holding themselves out as a franchisee (or a principal of a franchisee) of Franchisor (except for purposes of disclosing past experience on a resume);
  • (2) Promptly discontinue all use of the Marks, Copyrighted Materials, and Confidential Information and take appropriate action to return to Franchisor, or deliver to the transferee if Franchisor so designates, all Copyrighted Materials and Confidential Information in Franchisee's possession or within its control;
    • (3) Pay all amounts due under this Agreement;
  • (4) Pay to Franchisor all damages, costs, and expenses, including reasonable attorney's fees and enforcement costs, incurred by Franchisor in connection with any of Franchisee's default(s) under this Agreement;
    • (5) Comply with the covenants set forth in Section 7.;
  • (6) At Franchisor's option, assign to Franchisor, or if applicable, the transferee, all rights, control, and access to any business listings and Online Presences (including accounts, credentials, and login information) and telephone numbers (including personal cellphone numbers) related to or associated with the Franchised Business and execute all forms and documents required by Franchisor to transfer such items to Franchisor or, if applicable, the transferee. Franchisee agrees to use different telephone numbers, business listings, and Online Presences in connection with any subsequent business conducted by Franchisee. Franchisor has the right to prohibit Franchisee's continued control of, use of, or access to such Online Presences;
  • (7) Comply with Franchisor's instructions related to the Technology and Franchised Business Data;
  • (8) Pay in full all of the creditors and suppliers of the Franchised Business and/or the Publication within 15 days after the expiration or termination of this Agreement; and
  • (9) Pay to Franchisor all damages, costs, and expenses, including reasonable attorneys' fees and lost profits, incurred by Franchisor as a result of or subsequent to the termination or expiration of this Agreement, including costs and expenses related to obtaining injunctive or other relief for the enforcement of any provisions of this Section 11.

12. INSURANCE; INDEMNIFICATION; INDEPENDENT CONTRACTOR

  • A. Insurance. Franchisee shall procure and maintain in full force and effect at all times during the Term of this Agreement, at Franchisee's expense, an insurance policy or policies protecting Franchisee against any demand or claim with respect to personal injury, death, or property damage, or any loss, liability, or expense whatsoever arising out of or occurring at or in connection with Franchisee's operation as an independent contractor.

Source: Item 22 — CONTRACTS (FDD page 71)

What This Means (2025 FDD)

According to Belocal's 2025 Franchise Disclosure Document, franchisees must take specific actions during the wind-down period, whether due to a transfer, expiration, or termination of the franchise agreement. Belocal requires franchisees to comply with their instructions regarding the wind-down of operations and to adhere to the wind-down procedures outlined in the Franchise Brand Standards Manual. Franchisees must also cooperate in good faith with Belocal, its affiliates, and their representatives during this period, which may include digital or in-person meetings if requested.

Upon expiration or termination of the agreement, franchisees must immediately cease operating the franchised business and stop representing themselves as a Belocal franchisee. They must discontinue all use of Belocal's Marks, Copyrighted Materials, and Confidential Information, returning these items to Belocal or their designated transferee. Franchisees are also obligated to pay all outstanding amounts due under the agreement, including damages, costs, and expenses incurred by Belocal due to any defaults.

Additionally, Belocal has the option to require franchisees to assign all rights, control, and access to business listings and Online Presences, including accounts, credentials, and telephone numbers, to Belocal or a transferee. Franchisees must comply with Belocal's instructions related to technology and franchised business data. They are also responsible for paying all creditors and suppliers of the franchised business within 15 days after the agreement's expiration or termination. Failure to comply with these wind-down procedures can result in Belocal charging Wind-Down Damages, which are defined as the greater of six months' worth of the average Royalty Franchisee paid for the prior 12 months or $2,500.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.