What costs are associated with transferring a Belocal franchise?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Management Fee | 45% of monthly Cash Received, plus any expenses we incur in managing the Franchised Business | Monthly | Only payable in the event we must operate your franchise due to death, disability, defaults etc. The Management Fee is in addition to other fees due to us. |
| Customer Complaint Fee | Our costs and expenses associated with our response to and any resolution of a complaint | On demand | If an advertiser, client, or third party complains to us and you fail to satisfactorily remedy the complaint, you will pay us our costs and expenses associated with our response to and any resolution of the complaint. |
| Wind-Down Damages | An amount equal to the greater of (a) 6 months’ worth of the average Royalty you paid for the 12 months prior to the default or (b) $2,500 | On demand | Only payable if you fail to comply with the wind-down procedures or abandon the Franchised Business. |
| Transfer Damages | Greater of 15% of transfer price or $25,000 | Within 15 days of our demand | You will pay these transfer damages if you do not comply with the transfer terms under the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee may incur transfer damages if they fail to comply with the transfer terms outlined in the Franchise Agreement. These transfer damages are calculated as the greater of 15% of the transfer price or $25,000. This fee is due within 15 days of demand from Belocal.
This means that if a franchisee attempts to sell their Belocal franchise without adhering to the franchisor's requirements, they could be penalized with a significant fee. For instance, if a franchise is sold for $100,000, the transfer damages would be $25,000, as 15% of the transfer price ($15,000) is less than the $25,000 minimum. However, if the franchise is sold for $200,000, the transfer damages would be $30,000, as 15% of the transfer price is greater than the $25,000 minimum.
Prospective franchisees should carefully review the transfer terms within the Franchise Agreement to understand the specific conditions that must be met to avoid these transfer damages. This includes understanding the required procedures, documentation, and approvals necessary for a compliant transfer. Failing to meet these requirements could result in a substantial financial penalty, impacting the profitability of the franchise sale.