How does Belocal calculate commission payments to franchisees?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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A. Commission Payments. Franchisor shall calculate Commissions on an issue-by-issue basis and shall pay Franchisee a monthly Commission based on the aggregate of all monthly Commissions earned for each of Franchisee's N2 publications (if Franchisee manages more than one N2 publication), unless the calculation of the Commission equals a Negative Commission, in which case, Franchisee shall not receive a Commission in such month, and the amount of the Negative Commission shall continue to be due and shall be deducted from Cash Received in subsequent month(s) as part of the Commission(s) calculation for such subsequent month(s). Franchisor reserves the right to make Commission payments based upon estimates of payments it or its affiliate will receive in connection with Advertising Contracts (defined below), and it and its affiliate reserve the right to refund, for any reason, payments made by advertisers. Commission payments shall be accompanied by a Commissions accounting and reconciliation report. If the Commissions report reflects that Franchisee has been paid a Commission in an amount that is more than Franchisee is due, then Franchisee must return to Franchisor the amount of overpayment ("Returnable Commissions"). Franchisee shall not be entitled to receive any payment after the final Commission payment that Franchisor makes to Franchisee following the termination, expiration, or transfer of this Agreement, for any reason. Franchisee shall not be entitled to receive any payment based upon past due monies associated with the Franchised Business that are collected by Franchisor or its affiliates after the termination, expiration, or transfer of this Agreement, for any reason. In addition to all requirements related to the printing of the first issue of the Publication and Franchisee's compliance with this Agreement generally, payment of Franchisee's first Commission is specifically conditioned upon Franchisee being a legal entity rather than an individual and securing and producing evidence of all insurance coverage required pursuant to Section 12 of this Agreement.
- B. Cross-Selling Fees. Franchisee agrees and acknowledges that any Selling Franchisee that sells print advertising for the Publication shall be entitled to receive Franchisor's then-current Outgoing Cross-Selling Fee, and Franchisee shall be entitled to receive Franchisor's then-current Receiving Cross-Selling Fee. Further, if Franchisee sells print advertising for a publication that is the responsibility of another franchisee, then Franchisee shall be eligible to receive Franchisor's then-current Outgoing Cross-Selling Fee for such sale(s), as set forth in the Franchise Brand Standards Manual, provided Franchisee complies with Franchisor's then-current policies, procedures, and guidelines related to cross-selling. Franchisor shall have the right to terminate Franchisee's right to cross-sell or this Agreement if Franchisee fails to comply with Franchisor's policies, procedures, and guidelines related to cross-selling. Currently, the Cross-Selling Fees are calculated as follows:
- (i) The Selling Franchisee will receive an Outgoing Cross-Selling Fee equal to 25% of the monthly Cash Received for each print advertisement sold by the Selling Franchisee that will be included in the publication managed by the Receiving Franchisee.
- (ii) The Receiving Franchisee will receive a Receiving Cross-Selling Fee equal to 75% of the monthly Cash Received for that print advertisement, less the Royalty of 15% of the Cash Received and the Publication Expenses.
Any time during the Term of this Agreement, with no prior notices unless otherwise required by law, Franchisor reserves the right to change the Cross-Selling Fee to be calculated as follows:
- (i) The Selling Franchisee would receive an Outgoing Cross-Selling Fee equal to 10% of the monthly Cash Received for each print advertisement sold by the Selling Franchisee that will be included in the publication managed by the Receiving Franchisee.
- (ii) The Managing Franchisee (as defined by Franchisor's then-current Franchise Brand Standards Manual) would receive a Managing Cross-Selling Fee equal to 30% of the monthly Cash Received for each print advertisement, less the Royalty of 15% of the Cash Received.
- (iii) The Receiving Franchisee would receive a Receiving Cross-Selling Fee equal to 60% of the monthly Cash Received for that print advertisement, less the Publication Expenses.
Notwithstanding the foregoing or anything to the contrary herein, in the event an advertiser on a cross-sold account (i) is permitted by Franchisor to terminate its Advertising Contract with Franchisor prior to the end of the term of such Advertising Contract and (ii) pays an early termination fee ("Early Termination Fee") in connection with such early termination, each of the Selling Franchisee and the Receiving Franchisee shall receive 50% of such Early Termination Fee.
- C. Pre-Print Commission. If Franchisee cross-sells print advertising for inclusion in a publication managed by another franchisee or affiliate before the first issue of the Publication is published, then Franchisee may elect to receive a Pre-print Commission in lieu of the Outgoing Cross-Selling Fee. If Franchisee elects to receive a Pre-print Commission, Franchisor shall pay Franchisee the Pre-print Commission within 20 days after the publication deadline of the publication in which the ad appears.
- D. Returnable Commissions. Franchisee and Principals are jointly and severally liable for, and shall return all Returnable Commissions to, Franchisor. Franchisor may deduct the amount of any Returnable Commissions from future Commissions payable to Franchisee hereunder. After the termination or expiration of this Agreement, Franchisor shall notify Franchisee and Principals of any Returnable Commissions, and Franchisee and Principals shall have 15 days to return such Returnable Commissions to Franchisor. Franchisee and Principals acknowledge that any failure by Franchisee or Principals to return
any Returnable Commissions to Franchisor within 15 days after any such notice is a breach of this Agreement for which Franchisor may pursue all legal and equitable remedies that may be available to it, including termination of this Agreement. If Franchisee fails to pay Returnable Commissions as required herein, and Franchisor elects, in its sole discretion, to pursue payment of any Returnable Commissions in collection, then Franchisee and Principals agree to pay any collection costs associated with such collection efforts in addition to the Returnable Commissions owed.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, commission calculations depend on several factors, including the type of advertisement sold and which entity manages the publication. Belocal calculates commissions on an issue-by-issue basis and pays franchisees monthly based on the total monthly commissions earned for each of their N2 publications. However, if the calculation results in a negative commission, the franchisee will not receive a commission that month, and the negative amount will be carried over and deducted from future payments. Belocal reserves the right to estimate commission payments based on anticipated advertising contract payments and can refund payments made by advertisers.
For print advertisements the franchisee sells for their own publication, the commission equals the total cash received for the publication in that month, minus the royalty and publication expenses for that publication. For print ads sold for inclusion in another franchisee's or Belocal's affiliate's publication, the franchisee receives the Outgoing Cross-Selling Fee or the Pre-print Commission, divided by the number of publications the franchisee manages. If another franchisee or Belocal's affiliate sells a print ad for inclusion in the franchisee's publication, the franchisee receives the Receiving Cross-Selling Fee. Additionally, franchisees earn commissions from digital extended reach services allocated to their publication, minus the extended reach fee. If Belocal institutes a fee for managing a client who publishes in another franchisee's publication, the franchisee receives the Managing Cross-Selling Fee, divided by the number of publications they manage. All other applicable fees and deductions are also factored in.
Belocal also offers an HD Sales Commission if the franchisee solicits leads for Hyport Digital. The amount, due date, and calculation of this commission are subject to change at Belocal's discretion. Factors influencing the HD Sales Commission include the type of good or service sold, other client purchases, whether the franchisee referred the client, the involvement of the Hyport Digital sales team, and the franchisee's role in facilitating the client relationship. The HD Sales Commission is paid only to the first franchisee introducing a new lead who hasn't been a Hyport Digital client in the past 12 months, and only if the client fully pays for the goods and services. This commission is calculated on the gross invoice price, less taxes, credits, discounts, rebates, and allowances, and is paid the month after the client's payment.
Franchisees authorized to sell into Bridge Publications receive a commission according to Belocal's current commission policy in the Franchise Brand Standards Manual. The calculation method for this commission may differ from the standard commission calculation, as determined by Belocal. The commission amount will always be at least the fees Belocal or its affiliates receive for selling Corporate Ads into the Publication. Commission payments are accompanied by a commission accounting and reconciliation report. If a franchisee is overpaid, they must return the overpayment to Belocal. Franchisees are not entitled to any payments after the termination, expiration, or transfer of the agreement, including payments based on past due monies collected after termination.