What is the look-back period used to determine which activities related to a Competitive Business are prohibited after the Belocal agreement terminates?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
For a period of two years after the termination, expiration, or transfer of this Agreement, regardless of the reason for such termination, expiration, or transfer, Franchisee and its Owner(s) shall not, within the Restricted Territory (as defined in Section 7.G. below):
(1) own, operate, or manage any Competitive Business, or
(2) engage in, provide, or assist others in engaging in or providing any Competitive Services; or
(3) perform any activities for or relating to a Competitive Business, the performance of which would reasonably be likely to involve the use or disclosure of Confidential Information, and which activity is similar to the activities Franchisee or the Owner(s) engaged in during the twelve-month period prior to the termination, expiration, or transfer of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the look-back period to determine prohibited activities related to a Competitive Business after the franchise agreement terminates is twelve months. Specifically, the agreement states that post-term non-competition restrictions apply to activities similar to those the franchisee engaged in during the twelve-month period prior to the termination, expiration, or transfer of the agreement. This means that for a period of two years after the agreement ends, a franchisee cannot engage in activities that are similar to what they did in the year leading up to the termination.
This restriction is further defined by specifying that the franchisee cannot own, operate, or manage any Competitive Business, nor can they engage in or assist others in providing Competitive Services. The Competitive Services are those which the Franchisee's Franchised Business provided at any time within the twelve-month period prior to the termination, expiration, or transfer of the Agreement. These services include selling digital or print advertising that competes with Belocal, publishing competing publications, developing relationships to market competing publications, organizing events for advertisers to market competing publications, or offering digital marketing and advertising services similar to those offered by Belocal.
This twelve-month look-back period is important for prospective franchisees to understand, as it defines the scope of activities they will be restricted from pursuing after leaving the Belocal franchise system. It is designed to protect Belocal's confidential information, goodwill, and legitimate business interests by preventing former franchisees from immediately leveraging their experience and knowledge gained during the franchise term to compete against Belocal. Franchisees should carefully consider this restriction and how it might impact their future business opportunities after the franchise agreement ends.