If a Belocal franchisee wishes to transfer substantially all of the assets of 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, the transferor and the proposed transferee must apply to Belocal for consent. This includes transferring interest in the Franchise Agreement or substantially all of the assets of the franchised business. Additionally, if any principal wishes to transfer any ownership interest in the franchisee, they must also apply to Belocal for consent.
This requirement ensures that Belocal maintains control over who becomes a franchisee and that any new franchisee meets their standards. The franchisee must submit all information Belocal requires to determine whether to approve the proposed transfer. Belocal will then notify the franchisee of its approval or disapproval within a reasonable time frame, not exceeding 30 days, after receiving all the requested information.
This process is typical in franchising, as franchisors want to ensure that new franchisees are qualified and capable of maintaining the brand's standards. The transfer is not valid without Belocal's consent, and any attempt to transfer without approval constitutes a material breach of the Franchise Agreement. This provision protects Belocal's interests by allowing them to vet potential new franchisees and maintain the integrity of their brand.
Prospective Belocal franchisees should be aware of these transfer requirements and the associated costs, including potential transfer fees and legal fees. Understanding the conditions under which a transfer can occur is crucial for planning the future of their franchise business.