Can Belocal require the franchisee to furnish information to the proposed transferee?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (2) Franchisor reserves the right to require Franchisee to prepare and furnish to the proposed transferee and/or Franchisor such financial reports and other data relating to the Franchised Business and the Publication as Franchisor deems reasonably necessary or appropriate for transferee and/or Franchisor to evaluate the Franchised Business, the Publication, and the proposed transfer.
Franchisor may review all information regarding the Franchised Business and the Publication that Franchisee provides to the proposed transferee, correct any information that Franchisor believes to be inaccurate, and provide the proposed transferee with copies of any reports that Franchisee has provided to Franchisor or that Franchisor has made regarding the operation of the Franchised Business and/or the Publication.
Franchisee Agrees that Franchisor shall have the right to confer with any proposed transferee and to furnish it with information concerning the Franchised Business, the Publication, and/or the proposed transfer without any liability to Franchisee, except for international misstatements made by Franchisor to transferee.
Any information furnished by Franchisor to any proposed transferee shall be for the sole purpose of permitting the proposed transferee to evaluate the Franchised Business, the Publication, and/or the proposed transfer and must not be construed in any manner or form whatsoever as claims of success or failure of the Franchised Business, the Publication, and/or the proposed transfer;
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal retains the right to require franchisees to prepare and furnish financial reports and other data about the franchised business and its publication to both the proposed transferee and Belocal itself. This information is what Belocal deems reasonably necessary or appropriate for evaluating the franchised business, the publication, and the proposed transfer.
This means that if a Belocal franchisee wants to sell their franchise, Belocal can mandate that the franchisee provide specific financial reports and other operational data to the potential buyer and to Belocal. This allows both parties to assess the business's viability and the suitability of the transfer.
Belocal also has the right to review all information the franchisee provides to the proposed transferee, correct any inaccuracies, and provide the proposed transferee with copies of reports the franchisee has given to Belocal or that Belocal has created regarding the business's operation and/or publication. Furthermore, Belocal can confer with any proposed transferee and furnish them with information concerning the franchised business, the publication, and/or the proposed transfer without liability to the franchisee, except for intentional misstatements made by Belocal to the transferee. Any information Belocal provides is solely for evaluating the business and the transfer, and it should not be construed as claims of success or failure.