What happens if a Belocal franchisee is overpaid in commissions?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
. If the Commissions report reflects that Franchisee has been paid a Commission in an amount that is more than Franchisee is due, then Franchisee must return to Franchisor the amount of overpayment ("Returnable Commissions"). Franchisee shall not be entitled to receive any payment after the final Commission payment that Franchisor makes to Franchisee following the termination, expiration, or transfer of this Agreement, for any reason. Franchisee shall not be entitled to receive any payment based upon past due monies associated with the Franchised Business that are collected by Franchisor or its affiliates after the termination, expiration, or transfer of this Agreement, for any reason. In addition to all requirements related to the printing of the first issue of the Publication and Franchisee's compliance with this Agreement generally, payment of Franchisee's first Commission is specifically conditioned upon Franchisee being a legal entity rather than an individual and securing and producing evidence of all insurance coverage required pursuant to Section 12 of this Agreement.
- B. Cross-Selling Fees. Franchisee agrees and acknowledges 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. Further, if Franchisee sells print advertising for a publication that is the responsibility of another franchisee, then Franchisee shall be eligible to receive Franchisor's then-current Outgoing Cross-Selling Fee for such sale(s), as set forth in the Franchise Brand Standards Manual, provided Franchisee complies with Franchisor's then-current policies, procedures, and guidelines related to cross-selling. Franchisor shall have the right to terminate Franchisee's right to cross-sell or this Agreement if Franchisee fails to comply with Franchisor's policies, procedures, and guidelines related to cross-selling. Currently, the Cross-Selling Fees are calculated as follows:
- (i) 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.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a franchisee receives a commission payment exceeding the amount due, the franchisee is obligated to return the overpayment, termed "Returnable Commissions," to Belocal. The franchisee and their Principals are jointly and severally liable for these Returnable Commissions. Belocal has the right to deduct the amount of any Returnable Commissions from future commission payments owed to the franchisee.
Following the termination or expiration of the Franchise Agreement, Belocal will notify the franchisee and their Principals of any outstanding Returnable Commissions, which must be returned within 15 days of the notice. Failure to return these commissions within the specified timeframe constitutes a breach of the Franchise Agreement, potentially leading to legal and equitable remedies, including termination of the agreement.
If Belocal pursues collection of unpaid Returnable Commissions, the franchisee and Principals are responsible for covering all associated collection costs, in addition to the original amount owed. This obligation to repay Returnable Commissions survives the expiration or termination of the Franchise Agreement, ensuring Belocal can recover overpayments even after the franchise relationship ends.
In the event Belocal makes payments or provides value to a franchisee in connection with any promotion or incentive and later discovers that the franchisee did not qualify to receive such awards, the franchisee has the right to credit the value of any such erroneous awards against Franchisee's Commissions until any such erroneous awards have been repaid in full by Franchisee.