If the Belocal Franchisee fails to make a payment, what action is the Principal required to take?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
If Principal is not an Owner, Principal shall not be bound by Sections 7.B and 7.D of the Agreement.
- (d) Principal agrees to jointly, individually, and severally become a surety and guarantor for the payment of all amounts Franchisee must pay under the terms of the Agreement, including under any indemnity.
Principal's liability under this undertaking shall be direct, immediate, and independent of the liability of, and shall be joint and several with, Franchisee and the other guarantors of Franchisee.
Principal shall render any payment or performance required under the Agreement upon demand if Franchisee fails or refuses punctually to do so.
Franchisor may proceed against Principal and Franchisee jointly and severally, or Franchisor may, at its option, proceed against Principal, without having commenced any action or obtained any judgment against Franchisee.
Principal agrees to pay all reasonable attorneys' fees and all costs and other expenses incurred in any collection or attempt to collect amounts due pursuant to this undertaking or any negotiations relative to the obligations hereby guaranteed or in enforcing this undertaking against Principal.
Principal consents and agrees that: (1) Principal's liability will not be contingent or conditioned upon Franchisor's pursuit of any remedies against the Franchisee or any other person; (2) Principal's liability will not be diminished, relieved, or otherwise affected by the Franchisee's insolvency, bankruptcy, or reorganization; the invalidity, illegality, or unenforceability of all or any part of the Agreement; or the amendment or extension of the Agreement with or without notice to the Principal; (3) Principal's liability shall not be diminished, relieved, or otherwise affected by any extension of time, credit, or other indulgence which Franchisor may grant to Franchisee or to any other person, including the acceptance of any partial payment or performance, or the compromise or release of any claims, none of
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the Principal acts as a guarantor for the franchisee's financial obligations. If the Belocal franchisee fails to make a payment punctually, the Principal is required to render the payment or performance required under the agreement upon demand. This means the Principal is immediately responsible for covering any amounts the franchisee owes to Belocal.
The Principal's liability is direct, immediate, and independent of the franchisee's liability. Belocal can pursue action against the Principal without first pursuing action or obtaining judgment against the franchisee. The Principal is jointly and severally liable with the franchisee and any other guarantors, giving Belocal multiple avenues for recovering owed amounts.
Furthermore, the Principal is responsible for all reasonable attorneys' fees, costs, and other expenses incurred by Belocal in its attempts to collect amounts due under the agreement. The Principal's obligations are not contingent on Belocal pursuing remedies against the franchisee first, nor are they affected by the franchisee's insolvency, bankruptcy, or any amendments to the franchise agreement. The Principal also waives any right to require Belocal to bring an action against the franchisee as a condition of liability.