Are ownership changes within a Belocal franchisee considered a transfer?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Any ownership or structural changes in Franchisee (including but not limited to, any merger; reorganization; transfer of shares, stock, or interests among owners; or issuance of additional shares or classes of stock or additional partnership interests) shall constitute and be deemed a transfer.
If Franchisee wishes to transfer all or part of its interest in the Franchised Business or this Agreement or in substantially all of the assets of the Franchised Business, or if Franchisee or any Principal wishes to transfer any ownership interest in Franchisee, transferor and the proposed transferee must apply to Franchisor for its consent.
Franchisee agrees to submit to Franchisor all information Franchisor may require in order to determine whether to approve a proposed transfer of the Franchised Business, and Franchisor agrees to notify Franchisee of its approval or disapproval within a reasonable period of time, not to exceed 30 days, after Franchisor has received all requested information relating to any proposed transfer of the Franchised Business.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, any changes to the ownership structure of a franchise are considered a transfer. This includes events like mergers, reorganizations, or the transfer of shares or stock between owners. Even the issuance of additional shares or new classes of stock can trigger the transfer rules.
This means that a Belocal franchisee needs to get approval from Belocal for any of these ownership changes. The franchisee must provide all necessary information to Belocal so that Belocal can decide whether to approve the transfer. Belocal has 30 days to notify the franchisee of their decision after receiving all the required information.
If a Belocal franchisee proceeds with a transfer without getting the required approval, it will be considered a breach of the franchise agreement. Belocal could then impose transfer damages. These damages could amount to 15% of the price paid by the transferee or $25,000, whichever is greater.