Can Belocal require the franchisee to prepare and furnish information to the franchisor?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
These factors may include, but shall not be limited to, the following:
(1) Franchisee, its Principals, and its affiliates shall not be in default under this Agreement, or any other agreement with Franchisor or any of its affiliates, and shall have substantially and timely complied with all the terms and conditions of such agreements during their respective terms, including but not limited to having paid all amounts due;
(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 reserves the right to require franchisees to prepare and furnish financial reports and other data related to the franchised business and its publication. This information can be requested for both a proposed transferee and/or Belocal itself to evaluate the business and the potential transfer.
Belocal has the right to review all information provided by the franchisee to a potential transferee, correct any inaccuracies, and provide copies of reports about the franchised business and/or publication to the proposed transferee. Belocal can also confer with any potential transferee and provide them with information about the franchised business, publication, and/or the proposed transfer, without liability to the franchisee, except for intentional misstatements made to the transferee.
This means that as a Belocal franchisee, you must be prepared to regularly compile and submit financial and operational data to Belocal. This information is not only for Belocal's internal use but may also be shared with potential buyers if you decide to sell your franchise. It is crucial to maintain accurate and up-to-date records to comply with these requirements and ensure a smooth transfer process if you choose to sell your Belocal franchise.
Prospective franchisees should be aware that Belocal's ability to request and share this information is designed to protect the integrity of the Belocal brand and ensure that any potential new franchisees are fully informed about the business. Franchisees should clarify with Belocal the specific types of financial reports and data that will be required, as well as the frequency of these submissions, to fully understand their obligations.