What does the Belocal franchisee represent and warrant regarding related-party ownership?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and each Owner hereby represents and warrants that, except for the (a) Franchised Business or (b) a business which Franchisee has previously disclosed in writing to Franchisor and which Franchisor has specifically excepted from the following representation, warranty, and covenant ("Approved Business"), neither Franchisee, nor any Owner, nor any of their respective affiliates, Principals, or immediate family members (including, but not limited to, parents, spouses, or children) directly or indirectly owns, operates, manages, consults with, or otherwise assists in the operation of any franchise or publishing business of Franchisor or N2 Co.
Moreover, Franchisee and each Owner hereby covenants that, during the Term, neither Franchisee nor any Owner shall, nor shall Franchisee or any Owner permit their respective affiliates, Principals, or immediate family members (including, but not limited to, parents, spouses, or children) to, acquire, own, operate, manage, consult with, or otherwise assist in the operation of any franchise or publishing business of Franchisor or N2 Co. without the prior written consent of Franchisor, which consent Franchisor may withhold in its sole discretion.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the franchisee and each owner represents and warrants that they, their affiliates, principals, or immediate family members do not directly or indirectly own, operate, manage, consult with, or assist in the operation of any franchise or publishing business of Belocal or N2 Co. This representation has two exceptions: the franchised Belocal business itself, and any business previously disclosed in writing to Belocal and specifically approved by them.
Furthermore, the franchisee and each owner covenants that during the term of the agreement, they will not allow their affiliates, principals, or immediate family members to acquire, own, operate, manage, consult with, or assist in the operation of any franchise or publishing business of Belocal or N2 Co. without prior written consent from Belocal. Belocal retains the right to withhold this consent at its sole discretion.
This clause is designed to prevent conflicts of interest and protect Belocal's business model. A prospective franchisee should carefully consider this restriction, as it extends to immediate family members and affiliated entities. Obtaining written consent from Belocal is crucial before engaging in any activity that could be construed as a conflict of interest. This ensures compliance with the franchise agreement and avoids potential legal issues.