What representation does a Belocal franchisee make regarding its authorization to do business in other jurisdictions?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 22: CONTRACTS]
- J.
Organization.
If Franchisee is a corporation, partnership, limited liability company, or other legal entity, Franchisee represents and warrants the following:
(1) Franchisee is duly organized and validly existing under the laws of the state of its formation;
(2) Franchisee is duly qualified and is authorized to do business in each jurisdiction in which its business activities or the nature of the properties owned by it require such qualification;
(3) Franchisee's corporate charter or written partnership or limited liability company agreement shall at all times provide that the activities of Franchisee are confined exclusively to the operation of the Franchised Business;
(4) The execution of this Agreement and the performance of the transactions contemplated hereby are within Franchisee's corporate power, if Franchisee is a corporation, or if Franchisee is a partnership or a limited liability company, are permitted under Franchisee's written partnership or limited liability company agreement and have been duly authorized by Franchisee; and
(5) Franchisee has provided to Franchisor prior to the execution of this Agreement, and from time to time during the Term of this Agreement shall provide to Franchisor at Franchisor's request, copies of Franchisee's articles of incorporation and bylaws or, as applicable, Franchisee's written partnership or limited liability company agreement, other governing documents, any amendments to such documents, resolutions authorizing Franchisee's entry into and performance of this Agreement, and any
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if the franchisee is a corporation, partnership, limited liability company, or other legal entity, it makes certain representations and warranties to Belocal. Specifically, the franchisee represents and warrants that it is duly qualified and authorized to conduct business in each jurisdiction where its business activities or the nature of its owned properties necessitate such qualification.
This means that a Belocal franchisee must ensure it is legally permitted to operate its business in any state or locality where its activities require it. This includes obtaining any necessary licenses, permits, or registrations. This representation is crucial because it ensures that the franchisee operates legally and does not expose Belocal to legal liabilities arising from the franchisee's failure to comply with local laws.
Furthermore, the franchise agreement stipulates that the franchisee's organizational documents (corporate charter, partnership agreement, etc.) must confine the franchisee's activities exclusively to the operation of the Belocal franchised business. This reinforces the focused nature of the franchise and prevents the franchisee from engaging in unrelated business activities that could potentially conflict with or detract from the Belocal business. The franchisee must also provide copies of these organizational documents to Belocal, both before signing the agreement and periodically upon request, allowing Belocal to verify compliance.