What obligations does the Assignee assume under the Belocal franchise agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Assumption. Assignee hereby assumes all of Assignor's obligations, agreements, commitments, duties, and liabilities under the Franchise Agreement and agrees to be bound by and observe and faithfully perform all of the obligations, agreements, commitments, and duties of Assignor under the Franchise Agreement with the same force and effect as if the Franchise Agreement had been originally written with Assignee as Franchisee.
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- Amendment to Franchise Agreement.
- a. All references to [Assignor Name] as Franchisee in the Franchise Agreement are hereby deleted and replaced with [Assignee Name].
- b. Attachment E to the Franchise Agreement is hereby deleted in its entirety and replaced with the Amended Attachment E attached hereto.
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- Representations and Warranties. Assignee hereby represents and warrants that the ownership interests in Assignee are accurately and completely described in the table set forth in Amended
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, an Assignee assumes all of the Assignor's obligations under the existing franchise agreement. Specifically, the Assignee agrees to be bound by and faithfully perform all obligations, agreements, commitments, and duties of the Assignor as if the agreement was originally written with the Assignee as the franchisee. This means the Assignee steps into the shoes of the original franchisee, taking on all responsibilities outlined in the original franchise agreement.
This assumption of obligations is a standard practice in franchise resales or transfers. It ensures that the Belocal franchise continues to operate under the same terms and conditions, maintaining consistency within the franchise system. The franchisor's consent is typically required for such assignments, as they need to ensure the Assignee is capable and willing to uphold the franchise agreement.
In addition to assuming the original franchisee's obligations, the agreement also stipulates that all references to the original franchisee (Assignor) in the Franchise Agreement are deleted and replaced with the name of the new franchisee (Assignee). Furthermore, Attachment E to the Franchise Agreement is deleted and replaced with an amended version. The Assignee must also accurately describe the ownership interests in an amended Attachment E and ensure that each person listed signs a Principals' Undertaking. This ensures that the franchisor has updated and accurate information about the current franchisee and its principals.
Overall, this arrangement protects Belocal by ensuring the ongoing operation of the franchise according to the established standards and agreements. For a prospective franchisee, it's crucial to thoroughly review the original franchise agreement and any amendments to fully understand the obligations they are assuming.