Is a reorganization considered a transfer of the Belocal franchise agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a reorganization of the franchisee is considered a transfer of the franchise agreement. The FDD states that any ownership or structural changes in the franchisee, including but not limited to a reorganization, constitutes a transfer.
This means that if a Belocal franchisee undergoes a reorganization, it is treated as a transfer of the franchise agreement. As such, the franchisee must obtain Belocal's prior written consent for the reorganization to take place. Failure to do so would be a breach of the agreement.
Belocal requires the franchisee to submit all information necessary for the franchisor to determine whether to approve the proposed transfer. Belocal will then notify the franchisee of its approval or disapproval within a reasonable period of time, not to exceed 30 days, after receiving all requested information.