What are some examples of other fees and/or deductions that Belocal franchisees may be subject to?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (iv) The amounts paid by advertisers for the Extended Reach services and allocated to the Publication; minus the Extended Reach fee for the applicable month; plus
- (v) If in the future we institute a fee for managing a client, for any print advertisement where you "manage" (as defined in our then-current Franchise Brand Standards Manual) a client who publishes a print advertisement in a publication managed by another franchisee, you will receive our then-current Managing Cross-Selling Fee (set forth in the preceding chart), divided by the number of Publications you manage; minus
- (vi) All other applicable fees and/or deductions applicable to you or the Publication, including, but not limited to: (1) extra copy orders fee; (2) late commission deductions; (3) design revision fee and adjustment fee; (4) missed deadline fee and late revisions fee; (5) Returnable Commissions (as defined below); (6) fees for services we or our affiliates provide, including any optional services you elect to receive from us or our affiliates; (7) cross-selling fees originating from your sales into publications managed by us or our affiliates or fees for Corporate Ads; (8) lead generation fees; (9) Administrative Credit Card Fees; and/or (10) Negative Commissions (as defined in the Franchise Agreement).
"Cash Received" means all revenue actually received by us or our affiliates from advertisers, recipients of the Publication, or other parties under the terms of advertising contracts or any other form of agreement or contract related to each issue of the Publication. You will not receive a Commission payment in the month or months that a Negative Commission occurs. Commission payments will be accompanied by a Commission accounting and reconciliation report that itemizes Cash Received and the other applicable fees and expenses described in this Item 6. If the Commission report reflects that you have been paid a Commission in an amount that is more than you are due, then you must return to us the amount of overpayment ("Returnable Commission").
"Pre-print Commission" means a one-time payment equal to 10% of the total value of the contract with the advertiser for the purchase of print advertisements to be included in a publication managed by a Receiving Franchisee. If you cross-sell print advertising into a publication managed by another franchisee or our affiliate before the first issue of the Publication is published, then you may elect to receive a Pre-print Commission in lieu of the Outgoing Cross-Selling Fee. If you elect to receive a Pre-print Commission, we will pay you the Pre-print Commission within 20 days after the publication deadline of the publication in which the ad appears.
In addition to all requirements related to the printing of the first issue of the Publication and your compliance with the Franchise Agreement generally, payment of your first Commission is conditioned upon you having created a legal entity to be the franchisee and securing and producing evidence of all required insurance coverage.
The Commission you receive for the sale of print advertisements and Extended Reach services is different from and in addition to the HD Sales Commission you will receive if you elect to solicit leads for and/or facilitate client relationships with Hyport Digital. Your opportunity to solicit leads for and facilitate client relationships with Hyport Digital is conditioned on the continuance of the sales program. We may modify and discontinue this program in our sole discretion.
The HD Sales Commission is subject to change in our sole discretion, but currently will range from 6% to 12% of revenues generated by a client's purchase of goods and services from Hyport Digital. The thencurrent rates will be available in the Franchise Brand Standards Manual. The variation in the HD Sales Commission currently depends upon the specifics of the sale and includes factors like (i) the type of good or service you sell to the client, (ii) the other goods and services the client purchases, (iii) whether or not
you referred the client to Hyport Digital, (iv) the scope of the involvement of the Hyport Digital sales team, and (v) your role in facilitating the relationship between the client and Hyport Digital.
The HD Sales Commission is due, as applicable, (1) only to the first franchisee that introduces a new prospective lead to Hyport Digital who has not already been a client of Hyport Digital during the previous 12-month period and (2) only if the client unconditionally and completely pays for goods and services purchased from Hyport Digital. The HD Sales Commission will be calculated on the gross invoice price of the goods and services less all taxes, credits, discounts, rebates, and allowances (if any). We will pay the commission in the month that follows the client's unconditional and complete payment of all purchased goods and services. To receive the HD Sales Commission, you must be in full compliance with all Franchise Agreements between you and us (and any other agreements with any of our affiliates). The amount, due date, calculation, and other details of the HD Sales Commission are subject to change in our sole discretion.
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees may encounter various fees and deductions beyond the initial franchise fee and ongoing royalties. These additional costs can significantly impact a franchisee's profitability and should be carefully considered. Some examples of these fees and deductions include extra copy order fees, late commission deductions, design revision and adjustment fees, missed deadline and late revisions fees, and returnable commissions. Franchisees may also be charged fees for services provided by Belocal or its affiliates, including optional services they elect to receive. Other potential fees include cross-selling fees, lead generation fees, administrative credit card fees, and negative commissions.
Belocal also outlines specific circumstances that trigger additional fees. A Management Fee, set at 45% of monthly Cash Received plus any incurred expenses, is charged if Belocal must operate the franchise due to events like death, disability, or default. A Customer Complaint Fee covers Belocal's costs in resolving complaints if a franchisee fails to do so satisfactorily. Wind-Down Damages, amounting to the greater of six months' average royalty or $2,500, are levied if a franchisee fails to comply with wind-down procedures or abandons the business. Transfer Damages, calculated as the greater of 15% of the transfer price or $25,000, are imposed for non-compliance with transfer terms.
Belocal retains the right to adjust flat fees annually to account for inflation, using metrics like the United States Social Security Administration's cost-of-living adjustment (COLA) or the Consumer Price Index. These adjustments can be cumulative, allowing Belocal to apply unutilized increases from previous years in subsequent years. While Belocal can increase these fees, the total increase for each fee during the franchise agreement term is capped at 25% of the current fee. Understanding these potential fees and deductions is crucial for prospective franchisees to accurately assess the financial viability of a Belocal franchise.