For Belocal franchisees, how is the amount calculated for print advertisements they sell for inclusion in a publication managed by another franchisee or the Franchisor's affiliate?

According to Belocal's 2025 Franchise Disclosure Document, the commission a franchisee receives for selling print advertisements for inclusion in a publication managed by another franchisee or the Franchisor's affiliate is calculated using one of two methods. The franchisee will receive either (x) the Franchisor's then-current Outgoing Cross-Selling Fee, divided by the total number of publications the franchisee manages, or (y) the Pre-print Commission, divided by the total number of publications the franchisee manages.

The document defines "Pre-print Commission" as a one-time payment equal to 10% of the total value of the contract with the advertiser for the purchase of print advertisements to be included in a publication managed by a Receiving Franchisee. The FDD also states that any Selling Franchisee that sells print advertising for the Publication shall be entitled to receive Franchisor's then-current Outgoing Cross-Selling Fee, and Franchisee shall be entitled to receive Franchisor's then-current Receiving Cross-Selling Fee.

Currently, the Cross-Selling Fees are calculated as follows: the Selling Franchisee will receive an Outgoing Cross-Selling Fee equal to 25% of the monthly Cash Received for each print advertisement sold by the Selling Franchisee that will be included in the publication managed by the Receiving Franchisee, and the Receiving Franchisee will receive a Receiving Cross-Selling Fee equal to 75% of the monthly Cash Received for that print advertisement, less the Royalty of 15% of the Cash Received and the Publication Expenses. However, Belocal reserves the right to change the Cross-Selling Fee to be calculated as follows: the Selling Franchisee would receive an Outgoing Cross-Selling Fee equal to 10% of the monthly Cash Received for each print advertisement sold by the Selling Franchisee that will be included in the publication managed by the Receiving Franchisee; the Managing Franchisee would receive a Managing Cross-Selling Fee equal to 30% of the monthly Cash Received for each print advertisement, less the Royalty of 15% of the Cash Received; and the Receiving Franchisee would receive a Receiving Cross-Selling Fee equal to 60% of the monthly Cash Received for that print advertisement, less the Publication Expenses.

It is important for prospective Belocal franchisees to understand these commission structures, as they directly impact potential revenue. The franchisor retains the right to modify these fees, so franchisees should stay informed about any changes to the commission policies. Understanding the definitions of terms like "Pre-print Commission", "Outgoing Cross-Selling Fee", and "Receiving Cross-Selling Fee" is crucial for accurately calculating potential earnings from cross-selling activities.