Does the Belocal Franchise Agreement specify the wind-down procedures that trigger the Wind-Down Damages?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Management Fee | 45% of monthly Cash Received, plus any expenses we incur in managing the Franchised Business | Monthly | Only payable in the event we must operate your franchise due to death, disability, defaults etc. The Management Fee is in addition to other fees due to us. |
| Customer Complaint Fee | Our costs and expenses associated with our response to and any resolution of a complaint | On demand | If an advertiser, client, or third party complains to us and you fail to satisfactorily remedy the complaint, you will pay us our costs and expenses associated with our response to and any resolution of the complaint. |
| Wind-Down Damages | An amount equal to the greater of (a) 6 months' worth of the average Royalty you paid for the 12 months prior to the default or (b) $2,500 | On demand | Only payable if you fail to comply with the wind-down procedures or abandon the Franchised Business. |
| Transfer Damages | Greater of 15% of transfer price or $25,000 | Within 15 days of our demand | You will pay these transfer damages if you do not comply with the transfer terms under the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the Wind-Down Damages are payable if a franchisee fails to comply with the wind-down procedures or abandons the franchised business. The specific details of these wind-down procedures are not outlined in this section of the FDD.
Failing to comply with the wind-down procedures or abandoning the Belocal franchised business can result in Wind-Down Damages. These damages are calculated as the greater of two amounts: either six months' worth of the average royalty paid by the franchisee over the 12 months prior to the default, or a flat fee of $2,500. This fee is due on demand.
Prospective Belocal franchisees should carefully review the Franchise Agreement to understand the specific wind-down procedures required by Belocal. It is important to understand what actions or omissions would constitute a failure to comply with these procedures, potentially triggering the Wind-Down Damages. Franchisees should also clarify what Belocal considers as 'abandoning the Franchised Business' to avoid unintentionally incurring these damages.