Who is included in the definition of 'immediate family members' for the purposes of the Belocal related-party ownership representation?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and each Owner hereby represents and warrants that, except for the (a) Franchised Business or (b) a business which Franchisee has previously disclosed in writing to Franchisor and which Franchisor has specifically excepted from the following representation, warranty, and covenant ("Approved Business"), neither Franchisee, nor any Owner, nor any of their respective affiliates, Principals, or immediate family members (including, but not limited to, parents, spouses, or children) directly or indirectly owns, operates, manages, consults with, or otherwise assists in the operation of any franchise or publishing business of Franchisor or N2 Co.
Moreover, Franchisee and each Owner hereby covenants that, during the Term, neither Franchisee nor any Owner shall, nor shall Franchisee or any Owner permit their respective affiliates, Principals, or immediate family members (including, but not limited to, parents, spouses, or children) to, acquire, own, operate, manage, consult with, or otherwise assist in the operation of any franchise or publishing business of Franchisor or N2 Co. without the prior written consent of Franchisor, which consent Franchisor may withhold in its sole discretion.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the definition of 'immediate family members' is relevant to the 'Related-Party Ownership' section of the franchise agreement. This section requires franchisees and their owners to represent and warrant that they, their affiliates, principals, or immediate family members do not own, operate, manage, consult with, or assist in any competing franchise or publishing business, unless previously disclosed and approved by Belocal. This representation extends throughout the term of the franchise agreement.
For the purposes of this representation, 'immediate family members' specifically includes parents, spouses, and children. This means that these individuals are also subject to the restrictions on owning or operating competing businesses. This clause aims to prevent conflicts of interest and protect Belocal's market position by ensuring that franchisees and their close family members are not directly involved in competing ventures.
This provision has significant implications for prospective franchisees. Before entering into a franchise agreement with Belocal, candidates must carefully assess whether any of their parents, spouses, or children are involved in businesses that could be considered competitive. Failure to disclose such involvement or ensure their compliance could lead to a breach of the franchise agreement. Franchisees should discuss this clause with their legal counsel to fully understand its scope and implications for their family members.