What is the dependency for a Belocal franchisee to receive the Receiving Cross-Selling Fee?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees and acknowledges that any Selling Franchisee that sells print advertising for the Publication shall be entitled to receive Franchisor's then-current Outgoing Cross-Selling Fee, and Franchisee shall be entitled to receive Franchisor's then-current Receiving Cross-Selling Fee. Further, if Franchisee sells print advertising for a publication that is the responsibility of another franchisee, then Franchisee shall be eligible to receive Franchisor's then-current Outgoing Cross-Selling Fee for such sale(s), as set forth in the Franchise Brand Standards Manual, provided Franchisee complies with Franchisor's then-current policies, procedures, and guidelines related to cross-selling. Franchisor shall have the right to terminate Franchisee's right to cross-sell or this Agreement if Franchisee fails to comply with Franchisor's policies, procedures, and guidelines related to cross-selling. Currently, the Cross-Selling Fees are calculated as follows:
- (i) The Selling Franchisee will receive an Outgoing Cross-Selling Fee equal to 25% of the monthly Cash Received for each print advertisement sold by the Selling Franchisee that will be included in the publication managed by the Receiving Franchisee.
- (ii) The Receiving Franchisee will receive a Receiving Cross-Selling Fee equal to 75% of the monthly Cash Received for that print advertisement, less the Royalty of 15% of the Cash Received and the Publication Expenses.
Any time during the Term of this Agreement, with no prior notices unless otherwise required by law, Franchisor reserves the right to change the Cross-Selling Fee to be calculated as follows:
- (i) The Selling Franchisee would receive an Outgoing Cross-Selling Fee equal to 10% of the monthly Cash Received for each print advertisement sold by the Selling Franchisee that will be included in the publication managed by the Receiving Franchisee.
- (ii) The Managing Franchisee (as defined by Franchisor's then-current Franchise Brand Standards Manual) would receive a Managing Cross-Selling Fee equal to 30% of the monthly Cash Received for each print advertisement, less the Royalty of 15% of the Cash Received.
- (iii) The Receiving Franchisee would receive a Receiving Cross-Selling Fee equal to 60% of the monthly Cash Received for that print advertisement, less the Publication Expenses.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee's eligibility to receive the Receiving Cross-Selling Fee is contingent upon another franchisee or Belocal's affiliate selling print advertising for inclusion in the Belocal franchisee's publication. The Receiving Cross-Selling Fee is calculated as a percentage of the monthly cash received for that print advertisement.
Currently, the Receiving Franchisee will receive 75% of the monthly Cash Received for that print advertisement, less the Royalty of 15% of the Cash Received and the Publication Expenses. However, Belocal retains the right to change the Cross-Selling Fee structure, potentially altering the percentages received by the Selling, Managing, and Receiving Franchisees. In a changed scenario, the Receiving Franchisee would receive 60% of the monthly Cash Received for that print advertisement, less the Publication Expenses.
Belocal also has the right to terminate a franchisee's right to cross-sell or the Franchise Agreement itself if the franchisee fails to comply with Belocal's policies, procedures, and guidelines related to cross-selling. This highlights the importance of adhering to Belocal's standards to maintain eligibility for cross-selling fees and avoid potential penalties.
In the event of early termination of an advertising contract on a cross-sold account, both the Selling Franchisee and the Receiving Franchisee would receive 50% of any Early Termination Fee paid by the advertiser. This provides an additional potential revenue stream in specific circumstances.