If a Belocal franchisee wishes to transfer all or part of its interest in the Franchised Business, who must apply to the franchisor for consent?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisee wishes to transfer all or part of its interest in the Franchised Business or this Agreement or in substantially all of the assets of the Franchised Business, or if Franchisee or any Principal wishes to transfer any ownership interest in Franchisee, transferor and the proposed transferee must apply to Franchisor for its consent.
Franchisee agrees to submit to Franchisor all information Franchisor may require in order to determine whether to approve a proposed transfer of the Franchised Business, and Franchisor agrees to notify Franchisee of its approval or disapproval within a reasonable period of time, not to exceed 30 days, after Franchisor has received all requested information relating to any proposed transfer of the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a franchisee wishes to transfer all or part of their interest in the franchised business, both the transferor and the proposed transferee must apply to Belocal for consent. This requirement ensures that Belocal maintains control over who enters the franchise system and has the opportunity to evaluate the qualifications of potential new franchisees.
This process involves submitting all information Belocal may require to assess the proposed transfer. Belocal is obligated to notify the franchisee of its decision (approval or disapproval) within a reasonable timeframe, specifically not exceeding 30 days, after receiving all the necessary information. This 30-day window allows Belocal to conduct its due diligence and make an informed decision regarding the transfer.
The FDD also stipulates that the transferor remains liable for all obligations to Belocal incurred before the transfer's effective date and must execute any documents to evidence this liability. Additionally, upon application for consent, the franchisee must pay Belocal a transfer fee equivalent to the then-current initial franchise fee for new franchisees, plus Belocal's reasonable attorney fees associated with the transfer. These conditions highlight the financial implications and responsibilities associated with transferring a Belocal franchise.
These transfer conditions are typical in franchising, as franchisors want to ensure that any new franchisee meets their standards and that the transfer does not negatively impact the brand. Prospective Belocal franchisees should carefully consider these requirements and associated costs when planning for a potential future sale of their franchise.