Can Belocal change the Cross-Selling Fee during the term of the agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 modify the Cross-Selling Fee structure during the term of the franchise agreement. This change can be made at any time and without prior notice, unless such notice is required by law.
Currently, the Cross-Selling Fees are structured such that the Selling Franchisee receives 25% of the monthly cash received for each print advertisement sold that is included in the Receiving Franchisee's publication. The Receiving Franchisee receives 75% of the monthly cash received for that advertisement, less a 15% royalty and publication expenses.
Belocal reserves the right to change the Cross-Selling Fee calculation. Under the changed calculation, the Selling Franchisee would receive 10% of the monthly cash received. A Managing Franchisee would receive 30% of the monthly cash received, less the 15% royalty. The Receiving Franchisee would then receive 60% of the monthly cash received, less publication expenses. This change gives Belocal considerable latitude to adjust the commission structure, potentially impacting the profitability of cross-selling activities for franchisees. Prospective franchisees should consider this flexibility when evaluating the financial implications of the Belocal franchise opportunity.