What are 'Negative Commissions' as defined in the Franchise Agreement for Belocal?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (vi) All other applicable fees and/or deductions applicable to you or the Publication, including, but not limited to: (1) extra copy orders fee; (2) late commission deductions; (3) design revision fee and adjustment fee; (4) missed deadline fee and late revisions fee; (5) Returnable Commissions (as defined below); (6) fees for services we or our affiliates provide, including any optional services you elect to receive from us or our affiliates; (7) cross-selling fees originating from your sales into publications managed by us or our affiliates or fees for Corporate Ads; (8) lead generation fees; (9) Administrative Credit Card Fees; and/or (10) Negative Commissions (as defined in the Franchise Agreement).
"Cash Received" means all revenue actually received by us or our affiliates from advertisers, recipients of the Publication, or other parties under the terms of advertising contracts or any other form of agreement or contract related to each issue of the Publication. You will not receive a Commission payment in the month or months that a Negative Commission occurs. Commission payments will be accompanied by a Commission accounting and reconciliation report that itemizes Cash Received and the other applicable fees and expenses described in this Item 6. If the Commission report reflects that you have been paid a Commission in an amount that is more than you are due, then you must return to us the amount of overpayment ("Returnable Commission").
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, 'Negative Commissions' are listed as one of the potential deductions applicable to a franchisee. The FDD states that a franchisee will not receive a commission payment in any month where a Negative Commission occurs. The commission payments are accompanied by a commission accounting and reconciliation report that itemizes cash received and other applicable fees and expenses.
If the commission report shows that a franchisee has been overpaid, the franchisee must return the overpayment, which is referred to as a 'Returnable Commission'.
Because the definition of 'Negative Commissions' is only referenced as being defined in the Franchise Agreement, prospective franchisees should carefully review the Franchise Agreement and ask Belocal for a clear explanation of what specific circumstances could lead to Negative Commissions and how they are calculated. Understanding these potential deductions is crucial for assessing the financial viability of a Belocal franchise.