Is the post-term non-solicitation agreement for Belocal franchisees dependent on the reason for termination, expiration, or transfer of the Franchise Agreement?

According to Belocal's 2025 Franchise Disclosure Document, the post-term non-solicitation agreement applies regardless of the reason for termination, expiration, or transfer of the Franchise Agreement. For a period of two years after the termination, expiration, or transfer of the agreement, the franchisee and its principals are restricted from soliciting or attempting to solicit any current or prospective business advertiser of Belocal (or its affiliates). This restriction applies to advertisers with whom the franchisee or any principal interacted during the twelve-month period prior to the termination, expiration, or transfer. The solicitation includes any form of oral, written, or electronic communications for the purpose of soliciting, offering, or accepting goods or services that are competitive with those offered by Belocal, its affiliates, or the franchisee.

This means that even if a Belocal franchise agreement ends on good terms, such as a successful transfer to a new owner, the franchisee is still bound by the non-solicitation agreement. Similarly, if the agreement is terminated due to a breach by the franchisee, the same restrictions apply. This provision aims to protect Belocal's business relationships and confidential information, ensuring that former franchisees do not unfairly compete by leveraging their knowledge and contacts gained during their time with Belocal.

The non-solicitation clause is designed to protect Belocal's legitimate business interests by preventing former franchisees from using their established relationships to divert business away from the franchise system. Franchisees should be aware of these restrictions and factor them into their future business plans. It is also important to understand who is considered a 'principal' and what constitutes 'solicitation' under the agreement to avoid any unintentional breaches of the non-solicitation clause. Prospective franchisees should seek legal counsel to fully understand the implications of this clause before signing the franchise agreement.