What are 'Notification and Remediation Related Costs' that a Belocal franchisee may be required to reimburse the franchisor for?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall reimburse Franchisor for all reasonable Notification and Remediation Related Costs (as defined below) incurred by Franchisor arising out of or in connection with any such Security Breach that is directly or indirectly caused by Franchisee, its Principals, and its Independent Staff. "Notification and Remediation Related Costs" shall mean Franchisor's internal and external costs associated with addressing and responding to any Security Breach, including but not limited to: (i) preparation and mailing or other transmission of legally required notifications to affected individuals, regulators, and attorneys general; (ii) preparation and mailing or other transmission of such other communications to customers, agents, or others as Franchisor deems reasonably appropriate; (iii) establishment of a call center or other communications procedures in response to such Security Breach (e.g., customer service FAQs, talking points, and training); (iv) engagement of information technology consultants, public relations, and other similar crisis management services; (v) payment of legal and accounting fees and expenses associated with Franchisor's investigation of and response to such Security Breach; and (vi) payment of costs for commercially reasonable credit reporting services that are associated with legally required notifications or are advisable under the circumstances.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee may be required to reimburse Belocal for 'Notification and Remediation Related Costs' if a security breach is directly or indirectly caused by the franchisee, its principals, or its independent staff. These costs encompass a range of expenses Belocal may incur to address and respond to the security breach.
The specific costs that a Belocal franchisee might have to cover include both internal and external expenses. These include the preparation and transmission of legally required notifications to affected individuals, regulators, and attorneys general. Additionally, costs may arise from preparing and sending communications to customers, agents, or other parties deemed appropriate by Belocal. The establishment of a call center or other communication procedures, such as customer service FAQs and training materials, also falls under reimbursable expenses.
Furthermore, the franchisee may be responsible for the engagement of information technology consultants, public relations firms, and other crisis management services. Legal and accounting fees associated with Belocal's investigation and response to the security breach are also included. Finally, the franchisee may have to cover the costs for commercially reasonable credit reporting services linked to legally required notifications or deemed advisable under the circumstances. This means a Belocal franchisee could face significant and varied expenses in the event of a security breach they cause, highlighting the importance of robust data protection and security measures.