What must a Belocal franchisee do before obtaining an offer from a buyer if they desire to transfer their interests?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee or any of its Principals desires to transfer all or any part of its interests in this Agreement, Franchisee, or the Franchised Business before obtaining an offer from a buyer, Franchisee must send Franchisor an offer in writing ("Offer Notice") containing the exact terms and conditions on which Franchisee desires to transfer such interest in this Agreement, Franchisee, or the Franchised Business.
Upon receipt of the Offer Notice, Franchisor shall have the option,
exercisable by notice ("Response Notice") delivered to Franchisee within 30 days thereafter, to indicate Franchisor's intention to accept Franchisee's offer to sell such interest in this Agreement, Franchisee, or the Franchised Business for the price and terms contained in the Offer Notice.
Franchisor has the right to investigate and analyze the Franchised Business and all other matters Franchisor deems necessary or desirable in order to make an informed investment decision with respect to the fairness of the terms described in the Offer Notice.
Franchisor's investigation right shall specifically include the right to inspect all of Franchisee's books and records relating to the Franchised Business, including all financial records and statements for the 3 full fiscal years preceding the date on which the 30-day right of first offer commences.
Franchisor may conduct such investigation and analysis of the Franchised Business in any manner Franchisor deems reasonably appropriate, and Franchisee and its Principals agree to provide Franchisor with any and all information Franchisor requests and to cooperate fully with Franchisor in connection therewith.
If Franchisor delivers a Response Notice, Franchisor and Franchisee and/or its Principals shall enter into a purchase agreement reasonably satisfactory to both Franchisor and Franchisee, containing such agreements, representations, warranties, covenants, and indemnities, and requiring such documents at closing, as is reasonably necessary to protect each party's interests.
The closing shall occur not more than 90 days after the date of the Response Notice, unless the closing is delayed for reasons beyond Franchisor's reasonable control.
If Franchisor does not deliver a Response Notice, as provided above, Franchise and/or its Principals may solicit offers to transfer this Agreement or the Franchised Business from other parties at the exact same price and on the exact same terms as presented in the Offer Notice for a period of time expiring 365 days after the Offer Notice is delivered to Franchisor.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee who wishes to transfer their interests in the franchise agreement or the franchised business must first provide Belocal with a written offer, termed an "Offer Notice." This notice must detail the exact terms and conditions under which the franchisee intends to transfer their interest. This step is required before the franchisee seeks an offer from a potential buyer.
Upon receiving the Offer Notice, Belocal has the option to accept the franchisee's offer within 30 days by delivering a Response Notice. Belocal also has the right to investigate the franchised business, including its financial records for the past three fiscal years, to assess the fairness of the terms presented in the Offer Notice. The franchisee and its principals are obligated to cooperate fully with Belocal during this investigation and provide any requested information.
If Belocal chooses to accept the offer, both parties will enter into a purchase agreement. The closing of this agreement must occur within 90 days of the Response Notice, unless delays arise due to circumstances beyond Belocal's control. If Belocal does not respond within the specified timeframe, the franchisee is then permitted to solicit offers from other parties, but only at the same price and terms as those presented in the initial Offer Notice to Belocal. This permission is valid for 365 days after the Offer Notice was delivered.