What is the maximum aggregate liability of N2 (Belocal) related to the franchise agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
IN NO EVENT SHALL N2'S AGGREGATE LIABILITY ARISING OUT OF OR RELATED TO THIS AGREEMENT, WHETHER ARISING OUT OF OR RELATED TO BREACH OF CONTRACT, TORT (INCLUDING NEGLIGENCE) OR OTHERWISE, EXCEED THE AGGREGATE AMOUNTS PAID TO N2 DURING THE PRECEDING 12-MONTH PERIOD PURSUANT TO THIS AGREEMENT.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, N2's (Belocal's) maximum aggregate liability arising from or related to the franchise agreement, whether due to breach of contract, tort, negligence, or other reasons, will not exceed the total amount the franchisee paid to N2 during the 12 months before the event that caused the liability.
This limitation of liability clause is a risk-management tool for Belocal, capping its potential financial exposure under the franchise agreement. For a prospective franchisee, this means that regardless of the damages they might suffer due to Belocal's actions or omissions, their recoverable amount from Belocal is limited to the fees they've paid over the previous year.
Franchisees should carefully consider this limitation, especially if they anticipate making substantial investments or if their potential damages could significantly exceed their annual payments to Belocal. It is a common practice in franchising to include liability limitations, but the specific terms can vary widely, so franchisees should evaluate this clause in light of their overall risk assessment.