What is the condition for the Franchisor's consent to the assignment and assumption in the Belocal agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not transfer or assign this Agreement without Franchisor's prior written consent.
Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material breach under this Agreement.
For purposes of this Agreement, the term "transfer" shall mean any issuance, sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation share exchange, or transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary.
Any ownership or structural changes in Franchisee (including but not limited to, any merger; reorganization; transfer of shares, stock, or interests among owners; or issuance of additional shares or classes of stock or additional partnership interests) shall constitute and be deemed a transfer.
If Franchisee wishes to transfer all or part of its interest in the Franchised Business or this Agreement or in substantially all of the assets of the Franchised Business, or if Franchisee or any Principal wishes to transfer any ownership interest in Franchisee, transferor and the proposed transferee must apply to Franchisor for its consent.
Franchisee agrees to submit to Franchisor all information Franchisor may require in order to determine whether to approve a proposed transfer of the Franchised Business, and Franchisor agrees to notify Franchisee of its approval or disapproval within a reasonable period of time, not to exceed 30 days, after Franchisor has received all requested information relating to any proposed transfer of the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee cannot transfer or assign their franchise agreement without the prior written consent of Belocal. Any attempt to transfer or assign the agreement without this consent is considered void and constitutes a material breach of the agreement.
For a franchisee seeking to transfer their interest in the franchised business, the franchisee and the proposed transferee must apply to Belocal for consent. The franchisee is responsible for providing all information requested by Belocal to evaluate the proposed transfer. Belocal then has a reasonable period, not exceeding 30 days after receiving all required information, to notify the franchisee of its decision.
Belocal retains significant discretion in approving or disapproving a proposed transfer, considering numerous factors they deem relevant. These factors can include various elements that Belocal believes are important for the continued success and integrity of the franchise system. Furthermore, the transferor and its principals must execute a general release of claims against Belocal, and the proposed transferee must meet Belocal's qualifications and complete any required training programs. The transferee must also enter into a written agreement assuming all obligations under the franchise agreement, and if the transferee is a business entity, its principals may also be required to guarantee performance. Finally, the transferee must execute Belocal's current form of franchise agreement, which may have different terms and higher fees, although the initial franchise fee is waived.