If the Belocal Franchisee makes representations in connection with the Agreement, what is the Principal's responsibility regarding those representations?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Without limiting any of Franchisee's obligations under the Agreement, Principal (i) makes all of the covenants, representations, warranties, and agreements set forth in Section 5.L. (Legal Compliance), Section 7. (Confidentiality, Covenants Against Unfair Competition and Solicitation), Section 8. (Use of Marks and Copyrighted Materials), Section 9. (Transfer and Assignment), and Section 14. (Applicable Law; Dispute Resolution) of the Agreement and is obligated to perform thereunder; and (ii) represents that each and every representation of Franchisee made in connection with the Agreement is true, correct, and complete in all respects as of the time given and as of the time of the undersigned's execution of this Principals' Undertaking.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a Principal of a Belocal franchisee bears responsibility for the representations made by the franchisee in connection with the Franchise Agreement. Specifically, each Principal represents that every representation made by the franchisee is true, correct, and complete, both at the time the representation is given and at the time the Principal signs the Principal's Undertaking. This means that Principals are attesting to the accuracy of the franchisee's statements.
This requirement is formalized in the Principal's Undertaking, which is a condition for Belocal entering into the Franchise Agreement. The franchisor requires this undertaking to ensure that Principals are equally bound to the accuracy and completeness of the information provided. This shared responsibility aims to prevent misrepresentations and ensure transparency in the franchise relationship.
Furthermore, the agreement stipulates that if a franchisee or any Principal makes a material misrepresentation to Belocal or breaches any warranty or representation, it constitutes a breach of the agreement. This provision underscores the importance Belocal places on truthful and accurate representations, and it provides Belocal with recourse in the event of any false or misleading statements. Prospective franchisees and their Principals should carefully review all representations made in connection with the Franchise Agreement to ensure their accuracy and completeness.