What is a Belocal franchisee prohibited from doing regarding advertising rights?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
. 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.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee faces several restrictions regarding advertising rights. Specifically, the franchisee cannot be a party to or a third-party beneficiary of any advertising contracts related to the publication; these contracts must be between Belocal or its affiliate and the advertiser. The franchisee is also prohibited from accepting payments from advertisers, communities, or industry groups, and cannot make payments on their behalf.
Belocal retains significant control over advertising, including the right to establish pricing requirements for advertising contracts and the ultimate discretion on whether to enter into any advertising contract. Furthermore, Belocal can restrict a franchisee from offering or selling advertisements to any client or prospective client at any time. This control extends to corporate ads, where Belocal or its affiliates can place advertisements in the franchisee's publication without the franchisee's approval, although Belocal may choose to pay the franchisee a commission for these ads.
These restrictions highlight the importance of adhering to Belocal's policies and standards. Franchisees must obtain prior written approval for advertising and promotional plans, and failure to comply with these standards can result in fines ranging from $500 for the first instance to $1,000 for subsequent instances. Additionally, Belocal owns all content created by the franchisee in connection with the franchised business, including all intellectual property rights. Prospective franchisees should carefully review these advertising restrictions and obligations to fully understand their scope and impact on their business operations.