Where will arbitration occur under the Belocal agreement, and who initially pays the costs?

According to Belocal's 2025 Franchise Disclosure Document, any disputes that cannot be resolved directly between the franchisee and Belocal will be settled by arbitration. The arbitration will take place in the city where Belocal maintains its principal business office at the time of the arbitration. This means a franchisee may be required to travel to Belocal's headquarters for arbitration hearings, regardless of where their franchise is located.

Initially, the costs and expenses of arbitration paid to the American Arbitration Association (AAA) and the arbitrator will be split equally between the two parties involved. However, other arbitration-related expenses, such as attorneys' fees and travel expenses, will be paid initially by the party that incurs them. This could create a financial burden for the franchisee, especially if Belocal's principal business office is far from the franchisee's location.

Ultimately, the arbitrator has the authority to award the prevailing party the reasonable costs and fees, including attorneys' fees, incurred during the arbitration. This means that if a franchisee wins the arbitration case, Belocal may be required to cover the franchisee's legal costs. Conversely, if Belocal wins, the franchisee may be responsible for Belocal's legal fees in addition to their own. Franchisees should factor in these potential costs when considering the franchise agreement.