Are the costs and fees associated with litigation to enforce advertising contracts separate from the Royalties that a Belocal franchisee must pay?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, Franchisee shall reimburse Franchisor and/or its affiliates for the costs of any litigation related to the enforcement of advertising contracts entered into in connection with the Publication, including without limitation legal and court costs and reasonable attorneys' fees.
For the avoidance of doubt, these costs and fees are separate from and in addition to any Royalties Franchisee must pay on collected amounts.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the costs and fees associated with litigation to enforce advertising contracts are separate from the royalties a franchisee must pay. Specifically, the franchisee is responsible for reimbursing Belocal for any costs incurred to enforce advertising contracts related to the publication.
If advertisers fail to meet their obligations under these agreements, Belocal reserves the right to pursue payment through various means, including collection agencies or lawsuits. Belocal will retain 7% of any amounts collected to cover its internal costs related to processing collection requests and managing collection agencies.
Furthermore, the franchisee must reimburse Belocal for all litigation costs associated with enforcing advertising contracts, including legal and court costs, as well as reasonable attorney's fees. The document explicitly states that these costs and fees are in addition to any royalties the franchisee is obligated to pay on collected amounts, meaning that franchisees cannot offset litigation costs with royalty payments.