What does the Belocal franchisee warrant regarding competing interests?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Competitive Business" includes the following divisible and severable business lines or services (each a "Competitive Service") which the Franchisee's Franchised Business provided (a) for covenants applicable during the Term, during the Term and (b) for covenants applicable post-term, at any time within the twelve-month period prior to the termination, expiration, or transfer of this Agreement:
(i) selling digital and/or print advertising to businesses for publication in or related to digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(ii) publishing and/or facilitating the publishing of digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(iii) developing relationships among members of Communities within the Territory, or members of Industry Groups within the Territory and within ten miles of the Territory, for the purpose of selling or marketing digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(iv) organizing, sponsoring, or hosting events for advertisers in the Publication or members of Communities within the Territory, or members of Industry Groups within the Territory and within ten miles of the Territory, for the purpose of selling or marketing digital or print publications, or digital or print advertising in digital or print publications, that compete with any N2 publication(s); or
(v) offering or selling digital marketing and advertising services which are offered or sold by Franchisor or its affiliates or are or were offered and sold by Franchisee.
H.
Reasonableness of Covenants.
Franchisee and Principals agree that the preceding covenants contain reasonable limitations as to time, geographical area, and scope of activity to be restrained and do not impose a greater restraint than is necessary to protect the goodwill or other legitimate business interests of Franchisor.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees make several agreements regarding competitive interests, both during their franchise term and after termination or transfer. These covenants aim to protect Belocal's market position and confidential information.
During the franchise term, a Belocal franchisee cannot engage in activities that directly compete with Belocal. This includes selling digital or print advertising for competing publications, publishing competing publications, developing relationships to market competing publications, organizing events to market competing publications, or offering digital marketing and advertising services similar to those offered by Belocal. These restrictions apply within the franchisee's territory and, in some cases, within a ten-mile radius of the territory.
Belocal also includes clauses addressing the reasonableness of these covenants, stating that both the franchisee and any involved principals agree that the limitations on time, geographical area, and scope are reasonable and necessary to protect Belocal's goodwill and business interests. If any of these restrictions are deemed too broad by an arbitrator or court of law, the agreement provides for alternative, narrower restrictions, such as a ten-mile radius around the territory or simply the territory itself. These non-compete obligations extend for twelve months prior to the termination, expiration, or transfer of the Franchise Agreement.