What happens if a Belocal franchisee pleads nolo contendere to a felony?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (7) Whether before or after the Effective Date, Franchisee or any Principal has been or is charged with, convicted of, or pleads nolo contendere to, a felony or indictable offense in any court, is subject to a judgment, default, lien, bankruptcy, or similar occurrence, becomes known to Communities, Industry Groups, or advertisers as being of bad moral character, disparages, embarrasses, or tarnishes Franchisor's reputation, or fails to comport itself at all times in accordance with the highest standards of conduct and behavior, consistent with its responsibilities as a franchisee;
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a franchisee or any principal associated with the franchise pleads nolo contendere to a felony, whether before or after the effective date of the franchise agreement, it constitutes a breach of the agreement. This is explicitly stated as grounds for potential action by Belocal.
This clause gives Belocal the right to take action against the franchisee. The FDD does not specify what action Belocal may take. However, in the context of franchise agreements, such a breach typically allows the franchisor to terminate the franchise agreement. This means the franchisee could lose their franchise and the rights to operate under the Belocal brand.
It is important for prospective Belocal franchisees to understand that any felony charge or plea of nolo contendere, even if it occurs before the franchise agreement is signed, could jeopardize their investment and their ability to operate the franchise. Franchisees should seek legal counsel to fully understand the implications of this clause and how it might affect them, especially if they have any prior legal issues or concerns.