In the event of a breach of the Belocal agreement, what remedies is the Franchisor entitled to?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (C) In the event of a breach of this Agreement, Franchisor would be irreparably injured and without an adequate remedy at law and, therefore, upon any such breach or attempted breach of any provision hereof, Franchisor shall be entitled, in addition to any other remedies which it may have at law or in equity, to a temporary and/or permanent injunction and a decree for the specific performance of the terms of this Agreement, without the necessity of showing actual or threatened harm and without being required to furnish a bond or other security. The time periods relating to the obligations described in this Agreement will be tolled during any period of noncompliance.
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- Covenantor agrees to pay all expenses (including court costs and reasonable attorneys' fees and costs) incurred by Franchisor in enforcing this Agreement.
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- Any failure by Franchisor to object to or take action with respect to any breach of any provision of this Agreement by Covenantor will not operate or be construed as a waiver of or consent to that breach or any subsequent breach by Covenantor.
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- THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REFERENCE TO TEXAS CONFLICT OF LAW PRINCIPLES. COVENANTOR HEREBY IRREVOCABLY SUBMITS HIMSELF OR HERSELF TO THE JURISDICTION OF THE STATE AND FEDERAL DISTRICT COURTS LOCATED IN THE STATE, COUNTY, OR JUDICIAL DISTRICT IN WHICH FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS IS LOCATED. COVENANTOR HEREBY WAIVES ALL QUESTIONS OF PERSONAL JURISDICTION OR VENUE FOR THE PURPOSE OF CARRYING OUT THIS PROVISION. COVENANTOR HEREBY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON HIM OR HER IN ANY PROCEEDING RELATING TO OR ARISING UNDER THIS AGREEMENT OR THE RELATIONSHIP CREATED BY THIS AGREEMENT BY ANY MEANS ALLOWED BY TEXAS OR FEDERAL LAW. COVENANTOR FURTHER AGREES THAT VENUE FOR ANY PROCEEDING RELATING TO OR ARISING OUT OF THIS AGREEMENT WILL BE THE COUNTY OR JUDICIAL DISTRICT IN WHICH THE FRANCHISOR'S PRINCIPAL PLACE OF BUSINESS IS LOCATED; PROVIDED, HOWEVER, WITH RESPECT TO ANY ACTION WHICH INCLUDES INJUNCTIVE RELIEF OR OTHER EXTRAORDINARY RELIEF, FRANCHISOR MAY BRING SUCH ACTION IN ANY COURT IN ANY STATE WHICH HAS JURISDICTION.
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- FRANCHISOR AND COVENANTOR HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVE ANY RIGHT TO A JURY TRIAL IN ANY ACTION ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO ENCOMPASS ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a franchisee breaches the agreement, Belocal has several remedies available. Belocal can seek a temporary or permanent injunction and a decree for specific performance of the agreement terms. This means Belocal can ask a court to order the franchisee to stop the breaching behavior and to fulfill their obligations under the contract. Belocal does not need to demonstrate actual or threatened harm or provide a bond or security to obtain these remedies. Additionally, the time periods for the franchisee's obligations will be suspended during any period of noncompliance.
Belocal is also entitled to monetary compensation for the costs associated with enforcing the agreement. The franchisee must pay all expenses, including court costs and reasonable attorneys' fees, incurred by Belocal in enforcing the agreement. This ensures that Belocal can pursue legal action without incurring financial losses. These rights and remedies are cumulative, meaning Belocal can pursue any combination of legal actions and is not limited to a single remedy.
Furthermore, if a franchisee abandons the business or fails to follow wind-down procedures, Belocal can immediately terminate the agreement and charge "Wind-Down Damages." These damages are defined as the greater of six months' worth of the average royalty paid over the prior 12 months or $2,500. Belocal can deduct or withhold these damages from the franchisee's commissions or transfer the amount via EFT. This provision ensures Belocal is compensated for losses incurred if a franchisee prematurely ceases operations or fails to properly wind down the business.
In addition to terminating the agreement, Belocal has the option to assume management of the franchised business if the franchisee or any principal fails to comply with the agreement. This "step-in right" allows Belocal to manage the business until the default is cured or until Belocal decides to discontinue its management. This provides Belocal with control over the business to ensure compliance and maintain standards. These remedies are designed to protect Belocal's interests and ensure franchisees adhere to the terms of the franchise agreement.