What constitutes a 'Competitive Business' for Belocal franchisees, specifically regarding selling digital and/or print advertising within the twelve-month period prior to termination, expiration, or transfer of the agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Competitive Business" includes the following divisible and severable business lines or services (each a "Competitive Service") which the Franchisee's Franchised Business provided (a) for covenants applicable during the Term, during the Term and (b) for covenants applicable post-term, at any time within the twelve-month period prior to the termination, expiration, or transfer of this Agreement:
(i) selling digital and/or print advertising to businesses for publication in or related to digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(ii) publishing and/or facilitating the publishing of digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(iii) developing relationships among members of Communities within the Territory, or members of Industry Groups within the Territory and within ten miles of the Territory, for the purpose of selling or marketing digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(iv) organizing, sponsoring, or hosting events for advertisers in the Publication or members of Communities within the Territory, or members of Industry Groups within the Territory and within ten miles of the Territory, for the purpose of selling or marketing digital or print publications, or digital or print advertising in digital or print publications, that compete with any N2 publication(s); or
(v) offering or selling digital marketing and advertising services which are offered or sold by Franchisor or its affiliates or are or were offered and sold by Franchisee.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a 'Competitive Business' includes specific business lines or services considered competitive to Belocal, particularly concerning activities within the twelve-month period before the termination, expiration, or transfer of the Franchise Agreement. This definition is crucial for franchisees to understand their obligations and restrictions, especially post-termination.
Specifically, a 'Competitive Business' includes selling digital and/or print advertising to businesses for publication in or related to digital or print publications that compete with any N2 publication(s), including Belocal publications. It also includes publishing and/or facilitating the publishing of digital or print publications that compete with any N2 publication(s), including Belocal publications. These restrictions apply to activities undertaken at any time within the twelve-month period leading up to the termination, expiration, or transfer of the agreement.
Furthermore, developing relationships among members of Communities or Industry Groups within the Territory, or within ten miles of the Territory, to sell or market competing digital or print publications is considered a competitive activity. Organizing or hosting events for advertisers or community members within the Territory, or within ten miles of it, to market competing publications or advertising also falls under this definition. Lastly, offering or selling digital marketing and advertising services that are offered or sold by Belocal or its affiliates, or were offered and sold by the franchisee, is considered a 'Competitive Business'.
These definitions are important because they delineate the scope of activities a franchisee must avoid to comply with the non-compete provisions of the Franchise Agreement. Engaging in any of these activities within the specified timeframe and geographical area could be a breach of contract, leading to potential legal and financial repercussions. Prospective franchisees should carefully review these restrictions and seek legal counsel to fully understand their implications.