What is the minimum amount for the Belocal Wind-Down Damages fee?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Management Fee | 45% of monthly Cash Received, plus any expenses we incur in managing the Franchised Business | Monthly | Only payable in the event we must operate your franchise due to death, disability, defaults etc. The Management Fee is in addition to other fees due to us. |
| Customer Complaint Fee | Our costs and expenses associated with our response to and any resolution of a complaint | On demand | If an advertiser, client, or third party complains to us and you fail to satisfactorily remedy the complaint, you will pay us our costs and expenses associated with our response to and any resolution of the complaint. |
| Wind-Down Damages | An amount equal to the greater of (a) 6 months' worth of the average Royalty you paid for the 12 months prior to the default or (b) $2,500 | On demand | Only payable if you fail to comply with the wind-down procedures or abandon the Franchised Business. |
| Transfer Damages | Greater of 15% of transfer price or $25,000 | Within 15 days of our demand | You will pay these transfer damages if you do not comply with the transfer terms under the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the Wind-Down Damages fee has a minimum amount of $2,500. This fee is imposed if a franchisee fails to properly wind down their Belocal business according to the franchise agreement or if they abandon the business altogether.
The Wind-Down Damages fee is calculated as the greater of two amounts: six months' worth of the average royalty paid by the franchisee over the 12 months prior to the default, or a flat $2,500. This means that even if the royalty payments were very low, Belocal will still charge a minimum of $2,500.
For a prospective Belocal franchisee, it's important to understand the circumstances under which this fee could be charged. Failing to follow the correct procedures when closing the business or simply walking away from the franchise can trigger this fee. Franchisees should carefully review the wind-down procedures outlined in the franchise agreement to avoid incurring this expense.