In the event a portion of the Belocal Transfer Agreement is severed, what automatically happens to the agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as expressly provided to the contrary herein, each portion, section, part, term, and provision of this Transfer Agreement will be considered severable; and if, for any reason, any portion, section, part, term, or provision is determined to be invalid and contrary to, or in conflict with, any existing or future law or regulation by a court or agency having valid jurisdiction, such determination will not impair the operation of, or have any other effect upon, the other portions, sections, parts, terms, or provisions of this Transfer Agreement that may remain otherwise intelligible, and the latter will continue to be given full force and effect and bind the parties; the invalid portions, sections, parts, terms, or provisions will be deemed not to be part of this Transfer Agreement; and such portion, section, part, term, or provision as similar as possible to that which was severed will automatically be added, which addition will be valid and not contrary to or in conflict with any law or regulation.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a part of the Transfer Agreement is deemed invalid by a court or agency with jurisdiction, the remaining valid parts of the agreement will still be in effect and bind the parties. The portion that was deemed invalid will no longer be part of the Transfer Agreement. Furthermore, a similar provision to the one that was severed will automatically be added, as long as this addition is valid and doesn't conflict with any laws or regulations.
This "severability" clause is a standard legal protection. It ensures that if one specific term is found unenforceable, the entire agreement doesn't collapse. Instead, the rest of the contract remains valid and binding. This is beneficial for both Belocal and the franchisee because it provides stability and reduces the risk of the entire agreement being invalidated due to a single issue.
For a prospective Belocal franchisee, this means that if a specific clause in the Transfer Agreement is ever challenged and found to be unenforceable, the rest of the agreement will likely remain in effect. Additionally, the agreement will be modified to include a provision as similar as possible to the one that was severed, which aims to maintain the original intent of the agreement as much as possible while complying with legal requirements.