What is the Belocal franchisee obligated to do regarding the sale of advertising in the Publication?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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In promoting the Publication, Franchisee, its Principal(s), operations manager, and other representatives, must:
(1) Solicit contracts for print advertising in the Publication from advertisers and digital advertising services ("Advertising Contracts"), quoting prices and terms set by Franchisor or its affiliate (or otherwise approved by Franchisor in writing), and using the form contracts provided by Franchisor or its affiliate. To the fullest extent permitted by applicable law, Franchisor and/or its affiliate reserve the right to establish maximum, minimum, or other pricing requirements with respect to Advertising Contracts. Moreover, Franchisor or its affiliate shall have ultimate discretion regarding whether to enter into any Advertising Contract. All Advertising Contracts, or other contracts related to the Publication, must be between Franchisor or its affiliate and the applicable Community, Industry Group, or advertiser, and Franchisee shall not be a party to, or a third-party beneficiary of, any such Advertising Contract or any
other contract relating to the Publication. Additionally, all fees and amounts payable under the Advertising Contracts must be paid directly to Franchisor or its affiliate or their designee, as applicable, in accordance with the terms thereof, and Franchisee must not accept any payments from any Community, Industry Group, or advertiser, nor shall Franchisee make payments on behalf of any Community, Industry Group, or advertiser for any reason. Franchisor may terminate this Agreement for Franchisee's failure to comply with the requirements set forth in this Section 5.E.(1). Franchisee shall not enter into Advertising Contracts or any other contract related to the Publication on Franchisor or its affiliate's behalf, and Franchisor and its affiliates are party to any Advertising Contract or any other contract related to the Publication, not Franchisee or its Principals.
- (2) Forward to Franchisor or its affiliate all Advertising Contracts or other contracts related to the Publication which have been executed by a representative of an Industry Group or an advertiser, as applicable, for review, approval, and execution by Franchisor or its affiliate no later than 30 days after such contracts have been executed by the Industry Group or advertiser, as applicable, and enter all such contracts into the accounting system (Portal) designated by Franchisor within seven days from the date of sale.
- (3) Franchisee must make at least ten Qualified Sales within the first sixteen weeks of Franchisee's operation of the Franchised Business ("Pre-Print Sales Requirement"). A "Qualified Sale" for purposes of this Agreement shall have the definition given such term in the Franchise Brand Standards Manual. If Franchisee fails to satisfy the Pre-Print Sales Requirement, Franchisor may provide Franchisee with a business improvement plan ("Business Improvement Plan") with metrics and strategies for Franchisee to improve its sale of Advertising Contracts. Any failure by Franchisee to successfully complete any Business Improvement Plan shall constitute a default under this Agreement and shall be grounds for termination.
- (4) Each month, and for each Publication that Franchisee manages, Franchisee must solicit, gather, obtain, and, as applicable, generate, content for such Publication that complies with Franchisor's standards and requirements. Each month, and for each Publication that Franchisee manages, Franchisee must (i) maintain a minimum, monthly Commission in the amount prescribed in the Franchise Brand Standards Manual; (ii) include a minimum number of pages that meet Franchisor's standard within each issue of the Publication, as prescribed in the Franchise Brand Standards Manual; and (iii) include a minimum number of articles on the topics as prescribed in the Franchise Brand Standards Manual. Franchisor may change the amount of the minimum Commission, minimum number of pages, minimum number of events, and minimum number of topic-specific articles at any time during the Term of this Agreement, in its discretion. If Franchisee fails to satisfy any of the foregoing requirements, Franchisor may provide Franchisee with a Business Improvement Plan with metrics and strategies for Franchisee to improve its commissions, page count, or neighborhood-specific article count, as applicable. Any failure by Franchisee to successfully complete any Business Improvement Plan shall constitute a default under this Agreement and shall be grounds for termination.
- (5) For each Quarter, and for each Publication that Franchisee manages, Franchisee must complete the minimum number of Qualified Sales, as prescribed in the Franchise Brand Standards Manual. Franchisor may change the definition of Qualified Sales, the minimum number of Qualified Sales, and Quarter-related requirements at any time during the Term of this Agreement, in its discretion. A "Quarter" is a three-month period during a year.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees have specific obligations regarding the sale of advertising in the Publication. Franchisees must solicit contracts for print advertising and digital advertising services, adhering to the prices and terms set by Belocal. They are required to use the form contracts provided by Belocal or its affiliate. Belocal retains the right to set pricing requirements for these advertising contracts and has the ultimate discretion on whether to enter into any advertising contract. All advertising contracts must be between Belocal or its affiliate and the advertiser, and the franchisee cannot be a party to these contracts.
Franchisees are also obligated to forward all executed advertising contracts to Belocal or its affiliate for review, approval, and execution within 30 days of the advertiser's execution. These contracts must be entered into Belocal's designated accounting system (Portal) within seven days from the date of sale. Additionally, franchisees must achieve at least ten Qualified Sales within the first sixteen weeks of operation, known as the "Pre-Print Sales Requirement," as defined in the Franchise Brand Standards Manual. Failure to meet this requirement may result in a business improvement plan from Belocal, and failure to complete the plan can lead to termination of the franchise agreement.
Each month, franchisees must solicit, gather, and generate content for the Publication that complies with Belocal's standards. They must also maintain a minimum monthly commission, include a minimum number of pages in each issue, and include a minimum number of articles on topics as prescribed in the Franchise Brand Standards Manual. Belocal reserves the right to change these minimum requirements at any time. Failure to meet these monthly requirements may also result in a business improvement plan, with potential termination for non-compliance. Franchisees must also comply with Belocal's policies, procedures, and guidelines related to cross-selling if they are authorized to sell advertisements into N2 publications managed by Belocal or its affiliates.