Can Belocal allow other franchisees or affiliates to sell advertising in the Belocal franchisee's territory?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
. Franchisor has the right to allow other franchisees, affiliates of Franchisor, or any other party Franchisor deems appropriate to offer and sell advertising in any forms to clients located in Franchisee's Territory, without any liability to Franchisee. Franchisee shall obtain Franchisor's prior written consent before organizing an event that occurs more than 25 miles from Franchisee's Territory.
- B. Reserved Rights. The rights granted to Franchisee under this Agreement are nonexclusive, and Franchisee is not granted any territorial rights or other protection. Accordingly, Franchisor, its affiliates, and any other authorized person or entity shall, without limitation, have the right (1) to develop and establish other business systems (including systems that distribute products or services similar to those offered by the Franchised Business) using the Marks, or other names or marks, and to grant licenses to use those systems at any location without providing any rights to Franchisee; (2) to advertise and promote any N2 publications, N2 Co. businesses, and the businesses of Franchisor's franchisees, anywhere; (3) to operate, and license others to operate, any Franchised Business, N2 publication franchised businesses, or any business of any of Franchisor's affiliates, anywhere, including locations that are inside, adjacent to, or surrounded by Franchisee's Territory; and (4) to engage, directly or indirectly, at wholesale, retail, or otherwise, in the production, distribution, license, and sale of all forms (including electronic forms) of magazines, newsletters, advertising, marketing, graphic and web design, or other services and products, under the Marks, or under other names or marks, at any location, including in the Territory, through any method of distribution, including, but not limited to, mail order catalogs and the Internet, regardless of the proximity to, or the competitive impact on, the Franchised Business. Franchisor has the sole discretion to change Franchisee's Territory, including its size, shape, boundaries, and population, upon ninety (90) days' notice to Franchisee.
- C. Cross-publication Advertising. Notwithstanding anything to the contrary herein, Franchisee acknowledges and agrees that other persons or entities may sell advertising for the Publication.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal retains the right to allow other franchisees, its own affiliates, or any other party it deems appropriate to sell advertising in a franchisee's territory. This includes selling advertising in any form to clients located within the franchisee's designated area, without incurring any liability to the franchisee. This means that a Belocal franchisee's territory is not exclusive, and they may face competition from other Belocal franchisees, Belocal itself, or other entities authorized by Belocal within their own territory.
This lack of territorial exclusivity has significant implications for a prospective Belocal franchisee. It means that Belocal is not restricted from allowing others to compete directly with the franchisee within their defined territory. This could potentially dilute the franchisee's market share and revenue. The franchisee should be prepared to compete with other advertising sales efforts within their territory, which may require more aggressive marketing and sales strategies.
Furthermore, Belocal and its affiliates also have the right to place national, regional, or local advertisements, without the franchisee's involvement, and at Belocal's sole expense. While Belocal may choose to pay the franchisee a commission for these "Corporate Ads," it is not obligated to do so, and the commission structure may differ from the standard commission calculation. This highlights the importance of understanding Belocal's corporate ad commission policy, as detailed in the Franchise Brand Standards Manual, to fully grasp the potential financial impact on the franchisee.
In addition to the above, the FDD also states that the rights granted to the franchisee are nonexclusive, and the franchisee is not granted any territorial rights or other protection. Belocal, its affiliates, and any other authorized entity have the right to develop other business systems, advertise Belocal publications, and operate or license others to operate businesses anywhere, including within the franchisee's territory. This further emphasizes the competitive landscape a Belocal franchisee must navigate and the limited control they have over their territory.