If the Belocal franchise agreement is terminated mutually within the specified timeframe, what financial obligations remain?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
In the event of termination of this Agreement pursuant to this Section 10.E., neither party shall incur any liability or have any obligation to pay the other party any amounts hereunder, except for amounts due and owing as of the date of the mutual termination.
In Franchisor's sole discretion, Franchisor may condition Franchisee's termination under this Section 10.E. upon the parties' execution of a mutual termination and release agreement in the form required by Franchisor and Franchisee's compliance with the wind-down procedures in the Franchise Brand Standards Manual, and Franchisee shall be required to comply with all of its post-termination obligations required in this Agreement.
If Franchisee fails to comply with the terms of the mutual termination and release agreement, abandons the Franchised Business prior to the date of mutual termination, or fails to comply with the winddown procedures in the Franchise Brand Standards Manual, Franchisor may charge the Wind-Down Damages defined in Section 10.J. below.
- F.
Consent to Mutual Termination.
Franchisee may request mutual termination during the Term of this Agreement.
Franchisor has no obligation to consent to such mutual termination.
If, in Franchisor's sole discretion, Franchisor consents to mutual termination, Franchisor may establish the termination date, which date shall be no earlier than fifteen days, and no later than ninety days, after the date Franchisor receives Franchisee's request for mutual termination.
Franchisor shall give Franchisee at least three days prior notice of the effective date of termination.
Franchisor, in its sole discretion and for any reason and no reason, has the right to accelerate the wind-down period and terminate this Agreement earlier than the termination date initially communicated to Franchisor, subject to the three days prior notice requirement, unless Franchisor has the right to immediately terminate this Agreement due to a default by Franchisee.
During the period that is between fifteen days of the Franchisee's request and the effective termination date established by Franchisor, Franchisee shall comply with Franchisor's instructions regarding the wind-down of Franchisee's operations, comply with the wind-down procedures in the Franchise Brand Standards Manual, and cooperate in good faith with Franchisor, its affiliates, and their representatives during the wind-down period, including meeting digitally or in-person if requested.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, in the event of a mutual termination of the franchise agreement, neither party incurs liability or has an obligation to pay the other any amounts, except for amounts due and owing as of the date of the mutual termination. Belocal, at its sole discretion, may require the franchisee to execute a mutual termination and release agreement and comply with wind-down procedures outlined in the Franchise Brand Standards Manual.
If the franchisee fails to comply with the terms of the mutual termination and release agreement, abandons the franchised business before the mutual termination date, or does not follow the wind-down procedures, Belocal may charge Wind-Down Damages. Belocal has the right to set the termination date, which must be between 15 and 90 days after receiving the franchisee's request for mutual termination, providing at least three days' notice of the effective termination date.
During the period between the franchisee's request and the termination date, the franchisee must follow Belocal's instructions for winding down operations, adhere to the wind-down procedures in the Franchise Brand Standards Manual, and cooperate with Belocal and its representatives. Belocal retains the right to accelerate the wind-down period and terminate the agreement earlier, subject to a three-day notice, unless the termination is due to the franchisee's default.