Does Belocal require managers to have equity in the franchisee entity?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
We encourage but do not require an Owner to personally supervise the Franchised Business. We prefer to select franchisees who favor and appear committed to a "hands on" and well-informed approach to the business. The Franchised Business must be directly supervised and managed by a person, identified to us and accepted by us, who has both passed a background check and successfully completed our training program or for whom, based on his or her experience, we have waived this requirement. If an Owner is not willing to be the full-time operator of the Franchised Business, then you will be required to hire a manager acceptable to and approved by us, and any such manager(s) must successfully complete our training program and execute a confidentiality and non-solicitation agreement similar to the one that the Owners will execute. We do not require that your managers have any equity in the franchisee entity or receive any percentage of your Commissions. We strongly recommend that you devote a substantial amount of time to the Franchised Business, whether or not you hire a manager. Franchisees who do not devote their full time and efforts to the establishment and operation of the Franchised Business may generate lower advertising revenue and Commissions and lesser recognition in their areas than those franchisees who do devote their full efforts to the business.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 47–48)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal does not mandate that managers hold equity in the franchisee entity. However, Belocal encourages franchisees to take a hands-on approach to managing their business. If a franchisee chooses not to be the full-time operator, they must hire a manager approved by Belocal. This manager must pass a background check and complete the Belocal training program, or have the training requirement waived based on experience. The manager must also sign a confidentiality and non-solicitation agreement.
While Belocal does not require managers to have equity or receive a percentage of commissions, they strongly recommend that franchisees dedicate a significant amount of time to the business. Franchisees who are not fully engaged in the operation may experience lower advertising revenue, commissions, and recognition in their territory compared to those who are more involved.
This policy provides flexibility for Belocal franchisees, allowing them to choose whether to manage the business themselves or hire a manager. However, it also emphasizes the importance of active involvement in the business to maximize potential revenue and success. Prospective franchisees should consider their own availability and commitment level when deciding whether to personally manage the business or hire a manager.