Can Belocal discontinue the publication of the Test Publication, and if so, are there any penalties or compensation due to the franchisee?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee acknowledges and understands that the Publication is being tested by Franchisor to determine, among other things, the viability and financial parameters of the publication ("Test Publication"). Therefore, Franchisor may discontinue the publication of the Test Publication at any time without penalty to Franchisor and without any compensation to Franchisee.
-
- Management and Promotion of the Franchised Business. Section 5.E.(3) of the Franchise Agreement is hereby deleted in its entirety.
-
- Termination on Notice; No Cure. The following is added to the Franchise Agreement as new section under Section 10.C.:
Franchisor determines, in its sole discretion, that it will no longer publish or support the publishing of the Test Publication.
-
- Defined Term; Test Publication. Throughout the Agreement, the terms Publication and N2 publications also include the Test Publication. References to the BELOCAL brand and publications in the Agreement shall instead refer to the Test Publication brand and test publications.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal has the right to discontinue the publication of the Test Publication at any time. Specifically, if a franchisee signs the Test Publication Amendment, the agreement states that Belocal faces no penalties and owes no compensation to the franchisee if it chooses to discontinue the Test Publication. This condition is explicitly outlined in the amendment to the franchise agreement.
This provision is added as new language to the end of Section 1.A. of the Franchise Agreement, clarifying that the publication is being tested to determine its viability and financial parameters. Therefore, Belocal retains the discretion to cease publication without incurring any financial or legal repercussions. Furthermore, Section 5.E.(3) of the Franchise Agreement, related to management and promotion, is deleted entirely when the Test Publication Amendment is in effect.
Additionally, the amendment adds a new section under Section 10.C. of the Franchise Agreement, reinforcing Belocal's right to discontinue publishing or supporting the Test Publication. This clause underscores the experimental nature of the Test Publication and the franchisor's freedom to make decisions based on its assessment of the publication's performance. The terms Publication and N2 publications also include the Test Publication, and references to the BELOCAL brand and publications in the Agreement shall instead refer to the Test Publication brand and test publications.
Prospective franchisees should carefully consider the implications of the Test Publication Amendment. While it may offer an initial opportunity to enter the Belocal system, it also carries the risk that the publication could be discontinued without any recourse for the franchisee. Understanding this condition is crucial before signing the franchise agreement and the Test Publication Amendment.