What are 'Publication Expenses' in the context of calculating the Receiving Cross-Selling Fee for a Belocal franchisee?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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"Publication Expense" means Franchisor's affiliate's cost to design, publish, print, and deliver each issue of the Publication and undertake all other related tasks, including, without limitation, publication design costs, ad creation and design costs, printing costs, postage, administrative costs (including allocable portions of salaries, computer systems, etc.), and any miscellaneous costs. The Publication Expense for a particular publication is determined based on the number of homes contained in the Mailing List ("Home
Count") and the number of pages in the particular publication ("Page Count"). The Publication Expense for a particular publication can be determined by entering the Home Count and the Page Count in the Publication Calculator on Franchisor's Online Presence or as otherwise provided by Franchisor or its affiliate. Franchisor or its affiliate determines the cost basis used for calculating the Publication Expense ("Cost Basis") on an annual basis, and that Cost Basis is implemented on November 1 of each year and is applied through October 31 of the following year ("Calculation Year"). Notwithstanding anything to the contrary in this Agreement, Franchisor or its affiliate will not increase the Cost Basis by more than the greater of (a) 10% per Calculation Year or (b) the percentage change in the "Consumer Price Index – All Urban Consumers," which is determined and published by the Bureau of Statistics of the United States Department of Labor, for the immediately preceding Calculation Year; except that if postage rates increase at any time during any Calculation Year, Franchisor and its affiliate reserve the right to increase the Cost Basis during the Calculation Year by the amount of the postage rate increase.
"Receiving Franchisee" means the franchisee or affiliate of Franchisor who has the right to distribute the publication within which the print advertisements sold by a Selling Franchisee will be published.
"Royalty" means 15% of the Advertising Value of each issue of the Publication (or, in the case of cross-selling, the publication managed by another franchisee or an affiliate of Franchisor), whether or not Franchisor or its affiliate actually receives payment for the print advertisements.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Publication Expenses are a factor in calculating the Receiving Cross-Selling Fee. The Receiving Franchisee's fee is equal to 75% (or 60% under a changed calculation) of the monthly Cash Received for a print advertisement, less the Royalty of 15% of the Cash Received and the Publication Expenses. Publication Expense means Belocal's affiliate's cost to design, publish, print, and deliver each issue of the Publication and undertake all other related tasks, including publication design costs, ad creation and design costs, printing costs, postage, administrative costs (including allocable portions of salaries, computer systems, etc.), and any miscellaneous costs.
The Publication Expense for a particular publication is determined based on the number of homes contained in the Mailing List and the number of pages in the particular publication. Franchisees can determine the Publication Expense for a particular publication by entering the Home Count and the Page Count in the Publication Calculator on Belocal's Online Presence or as otherwise provided by Belocal or its affiliate.
Belocal or its affiliate determines the cost basis used for calculating the Publication Expense on an annual basis, and that Cost Basis is implemented on November 1 of each year and is applied through October 31 of the following year. Belocal or its affiliate will not increase the Cost Basis by more than the greater of (a) 10% per Calculation Year or (b) the percentage change in the "Consumer Price Index – All Urban Consumers," which is determined and published by the Bureau of Statistics of the United States Department of Labor, for the immediately preceding Calculation Year; except that if postage rates increase at any time during any Calculation Year, Belocal and its affiliate reserve the right to increase the Cost Basis during the Calculation Year by the amount of the postage rate increase.
For a prospective franchisee, understanding Publication Expenses is crucial as it directly impacts the profitability of cross-selling activities. By using the Publication Calculator, franchisees can estimate these expenses and factor them into their financial projections. The annual adjustments to the Cost Basis, capped at 10% or the Consumer Price Index change (with a postage exception), provide some predictability, but franchisees should stay informed about these changes to accurately forecast their earnings.