What constitutes 'Competitive Services' in the context of a Belocal franchise agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
(B) The term "Competitive Business" includes the following divisible and severable business lines or services (each, a "Competitive Service") which the Franchisee's Franchised Business of which Covenantor is a part provided (i) for covenants applicable during the term of the Covenantor's business relationship with Franchisee or the Franchised Business, at any time during that relationship and (ii) for covenants applicable after the term of the Covenantor's relationship with Franchisee or the Franchised Business, at any time within the twelve-month period prior to the termination of the Covenantor's business relationship with the Franchised Business or the termination, expiration, or transfer of the Franchisee's Franchise 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;
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the term "Competitive Services" refers to specific business activities that, if engaged in by the franchisee, would be considered competitive with Belocal's offerings. These services are defined in the franchise agreement and are applicable both during the term of the agreement and for a period of twelve months prior to its termination, expiration, or transfer.
Specifically, Competitive Services include selling digital or print advertising for publications that compete with N2 publications, including Belocal publications. This extends to publishing or facilitating the publishing of such competing publications. Furthermore, developing relationships within the franchisee's territory or nearby areas to market competing publications also falls under this definition. Organizing events for advertisers or community members to promote competing publications or advertising is also considered a Competitive Service.
Additionally, offering or selling digital marketing and advertising services that are offered or sold by Belocal or its affiliates, or were previously offered or sold by the franchisee, are considered Competitive Services. This broad definition aims to protect Belocal's market position and confidential information by preventing franchisees from directly competing with the franchisor during and for a limited time after the franchise agreement.
Prospective franchisees should carefully review these restrictions to understand the scope of prohibited activities, both during the franchise term and afterward. The restrictions are designed to protect Belocal's interests, but they also limit the franchisee's ability to engage in similar business activities, even after the franchise relationship ends. Understanding these limitations is crucial for planning future business ventures and ensuring compliance with the franchise agreement.