What happens if a Belocal franchisee does not comply with the transfer terms under the Franchise Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee (1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Management Fee | 45% of monthly Cash Received, plus any expenses we incur in managing the Franchised Business | Monthly | Only payable in the event we must operate your franchise due to death, disability, defaults etc. The Management Fee is in addition to other fees due to us. |
| Customer Complaint Fee | Our costs and expenses associated with our response to and any resolution of a complaint | On demand | If an advertiser, client, or third party complains to us and you fail to satisfactorily remedy the complaint, you will pay us our costs and expenses associated with our response to and any resolution of the complaint. |
| Wind-Down Damages | An amount equal to the greater of (a) 6 months’ worth of the average Royalty you paid for the 12 months prior to the default or (b) $2,500 | On demand | Only payable if you fail to comply with the wind-down procedures or abandon the Franchised Business. |
| Transfer Damages | Greater of 15% of transfer price or $25,000 | Within 15 days of our demand | You will pay these transfer damages if you do not comply with the transfer terms under the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee will be subject to transfer damages if they do not comply with the transfer terms outlined in the Franchise Agreement. These transfer damages are a financial penalty.
The amount of these transfer damages will be the greater of two calculations. Belocal will assess 15% of the transfer price or a flat fee of $25,000, whichever is higher. This amount is due within 15 days of Belocal's demand for payment.
This penalty could significantly impact the profitability of a franchise sale. Franchisees should carefully review the transfer terms in the Franchise Agreement and ensure full compliance to avoid incurring these damages. It is important to consult with a legal and financial advisor to fully understand the implications of these transfer terms.