Is a Belocal franchisee prohibited from selling digital advertising to businesses for publication in digital publications that compete with Belocal publications?

According to Belocal's 2025 Franchise Disclosure Document, a franchisee is restricted from certain competitive business activities, both during the term of the agreement and for a period after termination, expiration, or transfer of the agreement. Specifically, a 'Competitive Business' includes selling digital advertising to businesses for publication in digital publications that compete with Belocal publications. This restriction applies to services the Franchised Business provided during the term of the agreement and, post-term, to services provided within the twelve-month period before termination, expiration, or transfer.

This means that during the franchise term and for one year after leaving the Belocal system, a franchisee cannot actively sell digital advertising for competing digital publications. This restriction is in place to protect Belocal's market share and prevent franchisees from directly undermining the brand by promoting competitors. The FDD states that these covenants contain reasonable limitations regarding time, geographical area, and scope of activity and do not impose a greater restraint than necessary to protect Belocal's goodwill or other legitimate business interests.

These restrictions may impact a franchisee's business decisions, potentially limiting their ability to engage in other advertising ventures. However, the agreement also provides some flexibility, stating that if the restrictions are deemed too broad by an arbitrator or court of law, the restrictions may be limited to a ten-mile radius around the territory or even just the territory itself. A prospective franchisee should carefully consider these limitations and how they might affect their business strategy and revenue opportunities both during and after the franchise agreement.