What agreements must the Principal of a Belocal franchise execute?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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ATTACHMENT C PRINCIPALS' UNDERTAKING
In consideration of, and as an inducement to, the execution of that certain Franchise Agreement, and any revisions, modifications, and amendments thereto, (collectively, "Agreement") by and between N2 Franchising, Inc. ("Franchisor"), and [Franchisee], ("Franchisee"), and dated [Insert Date of Agreement]), the undersigned (each, a "Principal") agree(s) as follows:
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- Each Principal acknowledges and agrees as follows:
- (a) The undersigned is a "Principal," as defined in the Agreement, and has read the terms and conditions of the Agreement and acknowledges that the execution of this Principal's Undertaking is in partial consideration for, and a condition to, Franchisor entering into the Agreement with Franchisee and that Franchisor would not have entered into the Agreement without the execution of this Principal's Undertaking; and
- (b) Without limiting any of Franchisee's obligations under the Agreement, Principal (i) makes all of the covenants, representations, warranties, and agreements set forth in Section 5.L. (Legal Compliance), Section 7. (Confidentiality, Covenants Against Unfair Competition and Solicitation), Section 8. (Use of Marks and Copyrighted Materials), Section 9. (Transfer and Assignment), and Section 14. (Applicable Law; Dispute Resolution) of the Agreement and is obligated to perform thereunder; and (ii) represents that each and every representation of Franchisee made in connection with the Agreement is true, correct, and complete in all respects as of the time given and as of the time of the undersigned's execution of this Principals' Undertaking.
- (c) If Principal is an Owner, Principal (i) makes all of the covenants, representations, and warranties set forth in Sections 7.B and 7.D of the Agreement and (ii) represents that each and every representation of Franchisee made in connection with the Agreement is true, correct, and complete in all respects as of the time given and as of the time of the undersigned's execution of this Principals' Undertaking. If Principal is not an Owner, Principal shall not be bound by Sections 7.B and 7.D of the Agreement.
- (d) Principal agrees to jointly, individually, and severally become a surety and guarantor for the payment of all amounts Franchisee must pay under the terms of the Agreement, including under any indemnity. Principal's liability under this undertaking shall be direct, immediate, and independent of the liability of, and shall be joint and several with, Franchisee and the other guarantors of Franchisee. Principal shall render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a Principal must execute the Principal's Undertaking. This agreement is made in consideration of Belocal entering into a Franchise Agreement with the Franchisee. The franchisor requires this agreement as a condition of entering into the Franchise Agreement and states that it would not enter into the agreement without it.
The Principal's Undertaking requires the Principal to adhere to specific sections of the Franchise Agreement, including those related to legal compliance, confidentiality, non-competition, use of marks and copyrighted materials, transfer and assignment, and dispute resolution. If the Principal is an Owner, they must also adhere to covenants, representations, and warranties outlined in specific sections of the Franchise Agreement.
Additionally, in the event of a transfer of the franchise, the Transferee's Principals must execute the Principals' Undertaking attached to the New Franchise Agreement. This ensures that the obligations and responsibilities are clearly defined and legally binding for all parties involved in the franchise operation.