Does Belocal franchisor have the right to implement a royalty on revenue generated from local events?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (9) Subject to the terms of this Agreement and the policies and requirements of the Franchise Brand Standards Manual, organize local events for advertisers and, as applicable, members of Communities and/or members of Industry Groups.
Franchisor has the right to implement a royalty on revenue generated from these events, which Franchisor can implement and subsequently change upon ninety (90) days' notice to Franchisee.
Franchisee agrees to use the credit card processing platform that Franchisor designates to collect payments by credit card from sponsors or other participants in the event.
Franchisee agrees to pay Franchisor's or its affiliate's then-current credit card fee on such payments.
This fee may include the credit card transaction fees and a reasonable fee for Franchisor's or its affiliate's involvement with the administration of the payment platform.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal has the right to implement a royalty on revenue generated from local events organized by the franchisee. Belocal can implement this royalty and subsequently change it, but they must provide the franchisee with ninety (90) days' notice before doing so.
As a Belocal franchisee, you are required to use the credit card processing platform that Belocal designates for collecting credit card payments from event sponsors or participants. Additionally, you must pay Belocal's or its affiliate's then-current credit card fee on these payments. This fee may include credit card transaction fees and a reasonable fee for Belocal's or its affiliate's involvement in administering the payment platform.
This policy allows Belocal to benefit financially from events organized by franchisees, while also giving franchisees some advance warning of any changes to the royalty structure. Franchisees should factor in these potential royalty costs and credit card fees when planning and budgeting for local events to ensure profitability.