What happens if a Belocal franchisee attempts to transfer any interest in the franchise in violation of the agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Franchisee or any Principal transfers or attempts to transfer any interest in this Agreement, Franchisee, or the Franchised Business in violation of Section 9. of this Agreement;
If Franchisee or any of its Principals engages in a transfer without first complying with the applicable transfer provisions of this Agreement (including, without limitation, the provisions of this Section 9), Franchisee agrees to pay Franchisor, within 15 days of receiving notice from Franchisor, in addition to the amounts owed under this Agreement, transfer damages equal to the greater of (a) 15% of the price paid by the transferee to Franchisee or any Principal, as applicable; or (b) $25,000 ("Transfer Damages").
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.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, any attempt to transfer interest in the franchise that violates the agreement will be considered a material breach, and the transfer will be void.
Belocal can terminate the franchise agreement immediately with written notice, without giving an opportunity to cure the breach, if the franchisee or any principal attempts to transfer any interest in the agreement, the franchise, or the franchised business in violation of Section 9 of the agreement.
Additionally, if a franchisee engages in a transfer without complying with the transfer provisions, they must pay Belocal transfer damages within 15 days of notice. These damages are the greater of 15% of the price paid by the transferee or $25,000. Belocal considers this a reasonable estimate of the damages they would incur from an unauthorized transfer.