Can a Belocal franchisee transfer or assign the Franchise Agreement without the franchisor's consent?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall not transfer or assign this Agreement without Franchisor's prior written consent.
Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material breach under this Agreement.
For purposes of this Agreement, the term "transfer" shall mean any issuance, sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation share exchange, or transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary.
Any ownership or structural changes in Franchisee (including but not limited to, any merger; reorganization; transfer of shares, stock, or interests among owners; or issuance of additional shares or classes of stock or additional partnership interests) shall constitute and be deemed a transfer.
If Franchisee wishes to transfer all or part of its interest in the Franchised Business or this Agreement or in substantially all of the assets of the Franchised Business, or if Franchisee or any Principal wishes to transfer any ownership interest in Franchisee, transferor and the proposed transferee must apply to Franchisor for its consent.
Franchisee agrees to submit to Franchisor all information Franchisor may require in order to determine whether to approve a proposed transfer of the Franchised Business, and Franchisor agrees to notify Franchisee of its approval or disapproval within a reasonable period of time, not to exceed 30 days, after Franchisor has received all requested information relating to any proposed transfer of the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee is not allowed to transfer or assign the Franchise Agreement without obtaining prior written consent from Belocal. Any attempt to transfer or assign the agreement without this consent is considered invalid and constitutes a material breach of the agreement. This applies to transfers occurring by operation of law or any other means.
The term "transfer" is broadly defined, encompassing any issuance, sale, assignment, gift, pledge, mortgage, encumbrance, transfer by bankruptcy, judicial order, merger, consolidation, share exchange, or transfer by operation of law, whether direct or indirect, voluntary or involuntary. Furthermore, any changes in the ownership or structure of the franchisee, including mergers, reorganizations, transfers of shares or interests among owners, or the issuance of additional shares or partnership interests, are also considered a transfer.
If a Belocal franchisee wishes to transfer any interest in the franchised business, the agreement, or substantially all of the assets of the business, both the franchisee (transferor) and the proposed new owner (transferee) must apply to Belocal for consent. The franchisee must provide all information requested by Belocal to evaluate the proposed transfer. Belocal is then obligated to notify the franchisee of its decision (approval or disapproval) within a reasonable timeframe, not exceeding 30 days, after receiving all the necessary information.