Does Belocal consider the covenants within the agreement to contain reasonable limitations regarding time, geographical area, and scope of activity?

According to Belocal's 2025 Franchise Disclosure Document, Belocal states that the covenants contain reasonable limitations regarding time, geographical area, and scope of activity. Both the franchisee and the principals associated with the franchise agree that these covenants do not impose a greater restraint than necessary to protect Belocal's goodwill or other legitimate business interests.

Specifically, the agreement outlines restrictions on engaging in a "Competitive Business," defining it as selling or publishing competing advertising, developing relationships to market competing publications, organizing events for competing advertising sales, or offering digital marketing services similar to those offered by Belocal. These restrictions apply both during the term of the agreement and, for certain covenants, for a 12-month period after termination, expiration, or transfer of the agreement.

The agreement also specifies that if any part of a covenant is deemed too broad by a court or arbitrator, the franchisee will be bound by a lesser covenant that imposes the maximum duty permitted by law. Belocal also retains the right to reduce the scope of any covenant without the franchisee's consent, effective immediately upon notice. This ensures that the restrictions remain reasonable and enforceable.

Furthermore, the agreement states that each covenant is independent of others, and Belocal would be irreparably injured by a breach, entitling Belocal to injunctive relief. The franchisee is responsible for all expenses, including legal fees, incurred by Belocal in enforcing the agreement, and any failure by Belocal to object to a breach does not waive its rights regarding future breaches. The agreement is governed by Texas law.