What is the financial impact of the publication expenses deduction on the Receiving Cross-Selling Fee for a Belocal franchisee?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) The Receiving Franchisee will receive a Receiving Cross-Selling Fee equal to 75% of the monthly Cash Received for that print advertisement, less the Royalty of 15% of the Cash Received and the Publication Expenses.
Any time during the Term of this Agreement, with no prior notices unless otherwise required by law, Franchisor reserves the right to change the Cross-Selling Fee to be calculated as follows:
- (ii) The Managing Franchisee (as defined by Franchisor's then-current Franchise Brand Standards Manual) would receive a Managing Cross-Selling Fee equal to 30% of the monthly Cash Received for each print advertisement, less the Royalty of 15% of the Cash Received.
- (iii) The Receiving Franchisee would receive a Receiving Cross-Selling Fee equal to 60% of the monthly Cash Received for that print advertisement, less the Publication Expenses.
"Publication Expense" means Franchisor's affiliate's cost to design, publish, print, and deliver each issue of the Publication and undertake all other related tasks, including, without limitation, publication design costs, ad creation and design costs, printing costs, postage, administrative costs (including allocable portions of salaries, computer systems, etc.), and any miscellaneous costs. The Publication Expense for a particular publication is determined based on the number of homes contained in the Mailing List ("Home
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a Receiving Franchisee's cross-selling fee is impacted by publication expenses. The Receiving Franchisee, who manages the publication in which the cross-sold advertisement appears, receives a fee based on a percentage of the monthly cash received for that advertisement.
Currently, the Receiving Cross-Selling Fee is calculated as 75% of the monthly cash received for the print advertisement, less both the Royalty of 15% of the cash received and the Publication Expenses. Belocal retains the right to change the cross-selling fee structure, in which case the Receiving Franchisee would receive 60% of the monthly cash received for the advertisement, less the Publication Expenses.
Publication Expense is defined as Belocal's affiliate's cost to design, publish, print, and deliver each issue of the Publication and undertake all other related tasks, including, without limitation, publication design costs, ad creation and design costs, printing costs, postage, administrative costs (including allocable portions of salaries, computer systems, etc.), and any miscellaneous costs. The Publication Expense is determined by the number of homes contained in the Mailing List and the number of pages in the publication, calculated using a Publication Calculator on Belocal's Online Presence. The Cost Basis used for calculating the Publication Expense is determined annually, implemented on November 1st, and applied through October 31st of the following year. The Cost Basis will not increase by more than the greater of 10% per Calculation Year or the percentage change in the Consumer Price Index, with an exception for postage rate increases.