Does Belocal define 'satisfactorily remedy' in relation to the Customer Complaint Fee?
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, the term 'satisfactorily remedy' is not explicitly defined within the context of the Customer Complaint Fee. The FDD states that if an advertiser, client, or third party complains to Belocal, the franchisee is responsible for resolving the complaint. If the franchisee fails to satisfactorily remedy the complaint, Belocal may step in to resolve it, and the franchisee will be responsible for covering Belocal's costs and expenses associated with the response and resolution.
Because the term 'satisfactorily remedy' is not defined, there is ambiguity regarding what constitutes a satisfactory resolution. This lack of clarity could lead to disputes between Belocal and its franchisees over whether a complaint has been adequately addressed. The franchisee is at risk of incurring unexpected expenses if Belocal determines that the franchisee's efforts to resolve a complaint were insufficient.
Prospective Belocal franchisees should seek clarification from Belocal regarding the criteria used to determine whether a complaint has been satisfactorily remedied. Understanding Belocal's expectations and standards for complaint resolution is crucial for managing potential Customer Complaint Fee expenses. Franchisees may also want to inquire about examples of past complaints and resolutions to better understand the franchisor's perspective.
It is common practice in franchising for franchisors to maintain control over customer service and brand reputation. However, the absence of a clear definition for 'satisfactorily remedy' places a greater burden on the Belocal franchisee to interpret and meet the franchisor's expectations, potentially increasing the risk of incurring additional fees.