Is Belocal obligated to negotiate with suppliers for the benefit of its franchisees?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
We are not obligated to negotiate with any suppliers for our franchisees' benefit. If we choose to do so, we cannot guarantee the outcome of any negotiations including any price terms. We do not provide material benefits to franchisees based upon their use of designated or approved suppliers. We or our affiliates may receive payments from any supplier on account of its dealings with you and other franchisees. There are currently no purchasing or distribution cooperatives for the system.
We estimate that your total initial required purchases from us, our affiliates, or approved suppliers will be less than 3% of the cost of your initial investment. We estimate your required purchases for the operation of your Franchised Business from us, our affiliates, or approved suppliers will be 50% or more of your annual purchases or leases.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 33–35)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal is not obligated to negotiate with suppliers for the benefit of its franchisees. Even if Belocal chooses to negotiate with suppliers, it cannot guarantee any specific outcome, including price terms. This means that franchisees cannot rely on Belocal to secure favorable deals with suppliers.
Belocal or its affiliates may receive payments from suppliers based on the suppliers' dealings with franchisees. There are currently no purchasing or distribution cooperatives for the Belocal system. Franchisees are required to purchase from Belocal, its affiliates, or approved suppliers for an estimated 50% or more of their annual purchases or leases for operating their Belocal franchise.
This arrangement is fairly common in franchising, where franchisors often have established relationships with suppliers and may receive revenue from these relationships. However, it's important for prospective Belocal franchisees to understand that they may not have the flexibility to negotiate better deals on their own and should carefully evaluate the costs and benefits of using approved suppliers.