What conditions must a Belocal franchisee meet to be eligible for transfer approval?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
These factors may include, but shall not be limited to, the following:
(1) Franchisee, its Principals, and its affiliates shall not be in default under this Agreement, or any other agreement with Franchisor or any of its affiliates, and shall have substantially and timely complied with all the terms and conditions of such agreements during their respective terms, including but not limited to having paid all amounts due;
(2) Franchisor reserves the right to require Franchisee to prepare and furnish to the proposed transferee and/or Franchisor such financial reports and other data relating to the Franchised Business and the Publication as Franchisor deems reasonably necessary or appropriate for transferee and/or Franchisor to evaluate the Franchised Business, the Publication, and the proposed transfer.
Franchisor may review all information regarding the Franchised Business and the Publication that Franchisee provides to the proposed transferee, correct any information that Franchisor believes to be inaccurate, and provide the proposed transferee with copies of any reports that Franchisee has provided to Franchisor or that Franchisor has made regarding the operation of the Franchised Business and/or the Publication.
Franchisee Agrees that Franchisor shall have the right to confer with any proposed transferee and to furnish it with information concerning the Franchised Business, the Publication, and/or the proposed transfer without any liability to Franchisee, except for international misstatements made by Franchisor to transferee.
Any information furnished by Franchisor to any proposed transferee shall be for the sole purpose of permitting the proposed transferee to evaluate the Franchised Business, the Publication, and/or the proposed transfer and must not be construed in any manner or form whatsoever as claims of success or failure of the Franchised Business, the Publication, and/or the proposed transfer;
(3) The transferor and its principals, for themselves and on behalf of their respective guarantors, predecessors, affiliates, shareholders, members, partners, officers, directors, managers, employees, agents, representatives, attorneys, accountants, heirs, executors, administrators, successors, and assigns, if applicable, shall have executed a general release, in a form satisfactory to Franchisor, of any and all claims against Franchisor, Franchisor's predecessors and affiliates, their respective officers, directors, shareholders, partners, managers, members, agents, representatives, independent contractors, servants, employees, attorneys, accountants, guarantors, successors, and assigns, past and present, in their corporate and individual capacities, including, without limitation, claims arising under this Agreement and any other agreement with Franchisor or its affiliates, and under federal, state, or local laws, rules, and regulations or orders;
(4) The proposed transferee shall have demonstrated to Franchisor's satisfaction that it meets Franchisor's then-current qualifications, and, at the transferee's expense, transferee and any of its principals and any other personnel required by Franchisor shall complete any training programs then in effect for N2 publication franchisees upon such terms and conditions as Franchisor may require;
(5) The transferee shall enter into a written agreement, in a form satisfactory to Franchisor, whereby transferee shall assume full, unconditional, and joint-and-several liability for, and agree to perform from the date of the transfer, all obligations, covenants, and agreements of Franchisee under this Agreement.
If the transferee is a corporation, partnership, limited liability company, or other entity, those of transferee's principals who are designated as principals by Franchisor must also execute such agreement and guarantee the performance thereof;
- (6) The transferee shall execute Franchisor's then-current form of franchise agreement for a term ending on the expiration date of this Agreement.
The new franchise agreement shall supersede this Agreement in all respects, and its terms may differ from the terms of this Agreement, including higher fees, but the transferee shall not be required to pay an initial franchise fee.
If the transferee is a corporation, partnership, limited liability company, or other entity, those of transferee's principals who are designated as principals by Franchisor must also execute such agreement and guarantee the performance thereof;
(7) The transferor shall remain liable for all of its obligations to Franchisor under this Agreement incurred prior to the effective date of the transfer and must execute any and all instruments reasonably requested by Franchisor to evidence such liability;
(8) Upon application for consent, Franchisee must pay Franchisor a transfer fee in an amount equal to the then-current initial franchise fee that Franchisor generally charges to new franchisees, plus Franchisor's reasonable attorneys' fees incurred in connection with the transfer;
(9) Prior to or upon closing of the transfer, Franchisee shall pay in full all creditors and suppliers of the Franchised Business or the Publication; and
(10) If transferee is a corporation, partnership, limited liability company, or other entity, the transferee must make all of the representations, warranties, and covenants in Section 7. as Franchisor may request and must provide evidence satisfactory to Franchisor that such representations, warranties, and covenants are true and correct as of the date of the transfer.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee needs to meet several conditions to get approval for transferring their franchise. Belocal requires the franchisee and its principals not to be in default of the Franchise Agreement or any other agreements with Belocal or its affiliates. They must have also substantially and timely complied with all the terms and conditions of such agreements, including paying all amounts due. Belocal also reserves the right to require the franchisee to prepare and furnish financial reports and other data relating to the franchised business and the publication as Belocal deems reasonably necessary or appropriate for the transferee and/or Belocal to evaluate the franchised business, the publication, and the proposed transfer.
Additionally, the transferor and its principals must execute a general release of any and all claims against Belocal and its affiliates. The proposed transferee must demonstrate that they meet Belocal's then-current qualifications. The transferee, along with any of its principals and other personnel required by Belocal, must complete any training programs in effect for N2 publication franchisees at the transferee's expense. The transferee must also enter into a written agreement assuming full liability for all obligations under the Franchise Agreement. If the transferee is a corporation, partnership, limited liability company, or other entity, those of transferee's principals who are designated as principals by Belocal must also execute such agreement and guarantee the performance thereof.
The transferee must execute Belocal's then-current form of franchise agreement for a term ending on the expiration date of the original agreement. The terms of the new agreement may differ, including higher fees, but the transferee won't have to pay an initial franchise fee. The transferor remains liable for all obligations to Belocal incurred before the transfer date and must execute any instruments to evidence this liability. Upon application for consent, the franchisee must pay a transfer fee equal to the then-current initial franchise fee that Belocal generally charges to new franchisees, plus Belocal's reasonable attorneys' fees. Prior to or upon closing of the transfer, the franchisee must pay in full all creditors and suppliers of the franchised business or the publication. If the transferee is a corporation, partnership, limited liability company, or other entity, the transferee must make all of the representations, warranties, and covenants in Section 7. as Belocal may request and must provide evidence satisfactory to Belocal that such representations, warranties, and covenants are true and correct as of the date of the transfer.
These conditions are fairly standard in franchising, as franchisors typically want to ensure that the new franchisee is financially stable, well-trained, and committed to upholding the brand's standards. The transfer fee, which Belocal states will be the then-current initial franchise fee, can be a significant cost for the franchisee looking to transfer. The requirement for the transferee to sign Belocal's current form of franchise agreement is also typical, allowing Belocal to update the agreement and ensure all franchisees are operating under the same terms. Prospective franchisees should carefully consider these conditions and associated costs when evaluating a Belocal franchise.