Can a party assign their rights or obligations under the Belocal agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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9. TRANSFER AND ASSIGNMENT
A. By Franchisor.
- (1) Franchisor has the right to transfer or assign this Agreement and all or any part of its rights or obligations herein to any person or legal entity without prior notice to, or the consent of, Franchisee. Upon any such transfer or assignment, the transferee or assignee shall be solely responsible for all of Franchisor's obligations arising hereunder subsequent to the transfer or assignment.
- (2) If Franchisor transfers or assigns this Agreement to an unaffiliated third-party purchaser in connection with the sale of the entire N2 publication(s) franchising business, and if, as of the date of such transfer or assignment, the remaining Term of this Agreement is less than 540 days, then, prior
to or contemporaneously with the closing of such transfer or assignment, Franchisor shall, at Franchisee's option, enter into an amendment to this Agreement with Franchisee pursuant to which the then-existing Term of this Agreement shall be extended so that it expires on the date which is 540 days from the closing date of such transfer or assignment. Nothing in this Section 9.A.(2) limits or otherwise affects Franchisor's right to transfer or assign this Agreement as provided in Section 9.A.(1).
- B. By Franchisee. Franchisee shall not transfer or assign this Agreement without Franchisor's prior written consent. Any purported assignment or transfer, by operation of law or otherwise, made in violation of this Agreement shall be null and void and shall constitute a material breach under this Agreement. For purposes of this Agreement, the term "transfer" shall mean any issuance, sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation share exchange, or transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary. 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.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the franchisor has the right to transfer or assign the agreement without the franchisee's consent. The transferee or assignee becomes responsible for Belocal's obligations under the agreement after the transfer or assignment. If Belocal transfers the agreement to an unaffiliated third party in connection with selling the entire N2 publication(s) franchising business, and the remaining term is less than 540 days as of the transfer date, Belocal must offer the franchisee an amendment to extend the term to 540 days from the closing date, at the franchisee's option. This does not limit Belocal's right to transfer or assign the agreement as described previously.
However, the franchisee cannot transfer or assign the agreement without Belocal's prior written consent. Any attempt to do so without consent, whether by law or otherwise, is considered void and a material breach of the agreement.
Furthermore, the N2 Franchisee Services Agreement states that neither party can directly or indirectly assign, transfer, or delegate any of its rights or obligations without the prior written consent of the other party. Any such attempt is considered void. N2, however, can subcontract the Services. This agreement is binding upon the parties and their respective successors and permitted assigns, with no third-party beneficiaries except for these parties.