Who is responsible for Belocal's obligations after the Franchise Agreement is transferred or assigned?

According to Belocal's 2025 Franchise Disclosure Document, if Belocal transfers or assigns the Franchise Agreement, the responsibility for Belocal's obligations arising after the transfer or assignment shifts to the new transferee or assignee. Specifically, the transferee or assignee becomes solely responsible for all of Belocal's obligations under the agreement from that point forward. This transfer can occur without prior notice to or consent from the franchisee.

This means that a prospective Belocal franchisee needs to be aware that Belocal can transfer its obligations to another party at any time, and Belocal will no longer be responsible for upholding its end of the agreement after the transfer. The franchisee will then have to deal with the new entity, and the franchisee's relationship with Belocal will effectively end.

However, if Belocal transfers the agreement to an unaffiliated third party in connection with the sale of its entire N2 publication(s) franchising business and the remaining term of the agreement is less than 540 days, Belocal must offer the franchisee an amendment to extend the term to 540 days from the closing date of the transfer, at the franchisee's option. This provides some protection to the franchisee by ensuring a minimum term length even if the franchise is sold. This does not limit Belocal's right to transfer or assign the agreement as described above.

It is important for a prospective franchisee to carefully consider the implications of this transfer clause and to evaluate the potential risks associated with a change in franchisor. They should also seek legal advice to fully understand their rights and obligations in the event of a transfer.