What businesses are excepted from the Belocal related-party ownership representation?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and each Owner hereby represents and warrants that, except for the (a) Franchised Business or (b) a business which Franchisee has previously disclosed in writing to Franchisor and which Franchisor has specifically excepted from the following representation, warranty, and covenant ("Approved Business"), neither Franchisee, nor any Owner, nor any of their respective affiliates, Principals, or immediate family members (including, but not limited to, parents, spouses, or children) directly or indirectly owns, operates, manages, consults with, or otherwise assists in the operation of any franchise or publishing business of Franchisor or N2 Co.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the related-party ownership clause in the franchise agreement includes specific exceptions. Franchisees, their owners, affiliates, principals, and immediate family members are generally prohibited from owning, operating, or assisting in any competing franchise or publishing business of Belocal or N2 Co. However, this restriction does not apply to (a) the specific Belocal Franchised Business itself, or (b) any business that the franchisee has previously disclosed in writing to Belocal and which Belocal has specifically approved in writing as an "Approved Business."
This means that a prospective Belocal franchisee can operate their Belocal franchise without violating the related-party ownership clause. Additionally, if a franchisee or their related parties have an existing business that might be seen as competitive, they can seek written approval from Belocal to designate it as an "Approved Business," thereby exempting it from the restriction. Belocal retains the discretion to grant or withhold this approval.
This clause is designed to prevent conflicts of interest and protect Belocal's market position. By requiring disclosure and approval of related-party businesses, Belocal aims to ensure that franchisees and their affiliates are not directly competing with the Belocal system. Franchisees should carefully document any existing businesses and obtain written approval from Belocal to avoid potential breaches of the franchise agreement.