What document related to the New Franchise Agreement must the Transferee Principals execute according to the Belocal Transfer Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- New Franchise Agreement. Transferee and Transferee's Principals have read and understand Franchisor's current form of franchise agreement with related attachments, if any (collectively, "New Franchise Agreement"), and agree that on or before Closing, Transferee will enter into the New Franchise Agreement with Franchisor and execute or cause to be executed all attachments thereto, and Transferee Principals will each execute the Principals' Undertaking (Attachment C to the New Franchise Agreement).
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, in the event of a franchise transfer, the Transferee Principals are required to execute a specific document related to the New Franchise Agreement. Specifically, the Transferee Principals must each execute the Principals' Undertaking, which is designated as Attachment C to the New Franchise Agreement. This requirement is part of the overall process where the Transferee enters into a New Franchise Agreement with Belocal.
The purpose of the Principals' Undertaking is to ensure that the individuals who are designated as principals of the Transferee entity (if the Transferee is a corporation, partnership, or LLC) are personally bound by certain obligations and covenants within the New Franchise Agreement. This is a common practice in franchising to provide an additional layer of security and commitment to the franchisor, ensuring that key individuals are directly accountable for the performance and compliance of the franchise.
Prospective Belocal franchisees who are considering a transfer should carefully review the New Franchise Agreement and Attachment C, the Principals' Undertaking, to fully understand the obligations they will be assuming. They should also seek legal counsel to ensure they are aware of the implications of signing such an undertaking, as it creates personal liability for the principals involved. This requirement is intended to protect Belocal's interests and maintain the integrity of the franchise system by ensuring that those in control of the Transferee entity are fully committed to upholding the terms of the franchise agreement.