Does Belocal require an Owner's spouse to sign the Principals' Undertaking or personally guarantee the Belocal Franchise Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
We require all Principals to sign a Principals' Undertaking (attached to the Franchise Agreement as Attachment C), binding themselves individually to certain provisions of the Franchise Agreement, including the covenants against competition (Owners only) and solicitation and those restricting use of the Marks and disclosure of confidential information, restrictions on transfer, and dispute resolution procedures. The Principals must also guaranty amounts owed by the franchisee to us or our affiliates. We do not require an Owner's spouse to sign the Principals' Undertaking or otherwise personally guaranty the performance of the Franchise Agreement. At our request, you must have any other personnel who will have access to our confidential information, but whom we do not designate as a Principal, sign the Confidentiality Agreement and Ancillary Covenants Not to Solicit agreement attached to the Franchise Agreement as Attachment D-2. We have the right, in our sole discretion, to decrease the period of time or geographic scope of the covenants or eliminate the covenants altogether for any person who signs the Principals' Undertaking and the Confidentiality Agreement and Ancillary Covenants Not to Compete or Ancillary Covenants Not to Solicit agreements.
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 require an owner's spouse to sign the Principals' Undertaking or otherwise personally guarantee the performance of the Franchise Agreement. However, Belocal does require all Principals to sign a Principals' Undertaking, which binds them individually to certain provisions of the Franchise Agreement. These provisions include covenants against competition (for Owners only) and solicitation, restrictions on the use of Marks and disclosure of confidential information, restrictions on transfer, and dispute resolution procedures. Principals must also guarantee amounts owed by the franchisee to Belocal or its affiliates.
This means that while the spouse of an owner is not obligated to sign the Principals' Undertaking or guarantee the Franchise Agreement, the owners themselves, designated as Principals, are required to do so. This undertaking holds the Principals individually responsible for adhering to specific terms of the agreement, such as non-competition and confidentiality. Furthermore, they must guarantee the financial obligations of the franchise to Belocal.
Belocal also has the right to request that other personnel who have access to confidential information, but are not designated as Principals, sign a Confidentiality Agreement and Ancillary Covenants Not to Solicit agreement. Belocal retains the discretion to decrease the period of time or geographic scope of the covenants or eliminate the covenants altogether for any person who signs the Principals' Undertaking and the Confidentiality Agreement and Ancillary Covenants Not to Compete or Ancillary Covenants Not to Solicit agreements.