What constitutes a default under the Belocal franchise agreement if the franchisee or any Principal commits a second or subsequent event of default?

According to Belocal's 2025 Franchise Disclosure Document, if a franchisee or any principal associated with the franchise commits a second or subsequent event of default under the franchise agreement, it constitutes a default, regardless of whether the defaults are similar or different in nature and whether or not the franchisee cured the initial default after receiving notice from Belocal.

This provision means that Belocal franchisees must maintain strict compliance with all aspects of the franchise agreement. Even if a franchisee addresses and corrects an initial default, a subsequent infraction, no matter how minor or whether it's the same issue, can trigger further default consequences. This could potentially lead to termination of the franchise agreement, as outlined elsewhere in the document.

For a prospective Belocal franchisee, this highlights the importance of understanding and adhering to every detail of the franchise agreement. It also underscores the need for robust internal controls and monitoring to prevent repeated instances of non-compliance. Franchisees should prioritize training and oversight to ensure both they and their principals consistently meet Belocal's standards, as any misstep could have significant repercussions for their investment and business operation.