Does the Belocal franchise agreement allow Belocal to make decisions that apply differently to different franchisees?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Whenever Franchisor has expressly reserved in this Agreement, or is deemed to have a right and/or discretion to take or withhold an action, or to grant or decline to grant Franchisee a right to take or withhold an action, then except as otherwise expressly and specifically provided in this Agreement, Franchisor may make its decision or exercise its right and/or discretion on the basis of Franchisor's judgment of what is in Franchisor's best interests, including, without limitation, Franchisor's judgment of what is in the best interests of Franchisor's franchise network at the time Franchisor's decision is made or Franchisor's right or discretion is exercised, without regard to whether: (i) other reasonable alternative decisions or actions could have been made by Franchisor; (ii) Franchisor's decision or the action Franchisor takes promotes its financial or other individual interest; (iii) Franchisor's decision or the action Franchisor takes applies differently to Franchisee and one or more other franchisees or Franchisor's internal operations or its affiliates' operations; or (iv) Franchisor's decision or the exercise of Franchisor's right or discretion is adverse to Franchisee's interests.
In the absence of an applicable statute, Franchisor shall have no liability to Franchisee for any such decision or action.
Franchisor and Franchisee intend that the exercise of Franchisor's right or discretion shall not be subject to limitation or review.
If applicable law implies a covenant of good faith and fair dealing in this Agreement, Franchisor and Franchisee agree that such covenant shall not imply or impute any rights or obligations that are inconsistent with a fair construction of the terms of this Agreement and that this Agreement grants Franchisor the right to make decisions, take actions, and/or refrain from taking actions not inconsistent with Franchisee's rights and obligations hereunder.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the franchise agreement allows Belocal to make decisions that may apply differently to individual franchisees. Belocal retains the right to take or withhold actions and make decisions based on its judgment of what is in its best interests or the best interests of its franchise network. This includes decisions that may affect franchisees differently.
Specifically, the agreement states that Belocal's decisions can be made without regard to whether other reasonable alternatives exist, whether the decision promotes Belocal's financial interests, or whether the decision applies differently to franchisees. This means Belocal has broad discretion in how it manages the franchise system and can tailor its approach to different locations or franchisees as it sees fit.
This clause also stipulates that Belocal will not be liable to the franchisee for any such decision or action, in the absence of an applicable statute. Furthermore, the agreement specifies that the exercise of Belocal's discretion should not be subject to limitation or review. While the agreement acknowledges the potential for a covenant of good faith and fair dealing under applicable law, it clarifies that this covenant should not imply any rights or obligations inconsistent with Belocal's right to make decisions and take actions.
For a prospective franchisee, this means that Belocal has significant latitude in how it operates and manages the franchise system, and that decisions may not always be uniform across all franchisees. It is important for potential franchisees to understand this aspect of the agreement and to consider how it might impact their individual business.