Does the Belocal franchise agreement require Belocal to prioritize the franchisee's interests over its own?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
. Franchisee shall notify Franchisor immediately upon the occurrence of any situation that may have a significant negative impact on Franchisee, Franchisor, the Publication, or which could have a deleterious effect on the BELOCAL brand, Marks or System (a "Crisis"). Franchisee shall cooperate fully with Franchisor with respect to Franchisor's response to any Crisis and shall follow all of Franchisor's policies, procedures, and instructions in every such situation, including, without limitation, instructions regarding managing public relations and communications, as directed by Franchisor or as specified in the Franchise Brand Standards Manual and regardless of whether Franchisee has retained outside counsel or a public relations firm to assist with any such matter. A "Crisis" includes, but is not limited to, any event that occurs in connection with the Franchised Business or Publication that has or may cause harm or injury to the public, advertisers, or Independent Staff. In the event of the occurrence of a Crisis, Franchisor may establish emergency procedures which may require Franchisee to temporarily cease publishing the Publication, in which case Franchisor shall not be liable to Franchisee for any loss or costs, including consequential damages or lost profits occasioned thereby.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
Based on the 2025 Belocal Franchise Disclosure Document excerpts provided, there is no explicit clause that states Belocal must prioritize the franchisee's interests over its own. However, the FDD does outline obligations and responsibilities of both the franchisor and franchisee. For instance, the franchisee must adhere to brand standards and cooperate with Belocal in the event of a crisis that could negatively impact the brand. This suggests a shared interest in maintaining the brand's reputation and goodwill. The franchise agreement also includes clauses regarding the use of trademarks and copyrighted materials, emphasizing that all goodwill associated with the marks benefits Belocal.
Furthermore, the agreement includes covenants related to non-competition, both during and after the term of the agreement, which are designed to protect Belocal's legitimate business interests. These covenants restrict the franchisee from engaging in competitive activities within a specified geographical area and for a certain period. The franchisee also agrees that these covenants are reasonable and necessary to protect Belocal's goodwill. These clauses suggest that Belocal's interests are heavily protected within the franchise agreement.
In the event of a situation that may have a significant negative impact on Belocal, the publication, or the Belocal brand, the franchisee is required to notify Belocal immediately and cooperate fully with Belocal's response. Belocal also has the right to take control of communications if the publicity surrounding the event is likely to have a material adverse effect on the reputation or goodwill of the franchised business, publication, marks, system, or Belocal. This highlights Belocal's focus on protecting its brand and reputation, even if it means taking control of communications from the franchisee. A prospective franchisee should carefully review the franchise agreement and consider seeking legal counsel to fully understand their obligations and the extent to which Belocal's interests are prioritized.