Who is responsible for reimbursing Belocal for costs incurred to enforce advertising contracts related to the Publication?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee shall reimburse Franchisor and/or its affiliate for any costs Franchisor and/or its affiliate incur to enforce advertising contracts entered into in connection with the Publication.
If advertisers breach such agreements, Franchisor and its affiliates reserve the right, in their sole discretion, to seek payment from advertisers either by engaging a collections agency, instituting other collections means, and/or filing a lawsuit.
Franchisor shall retain 7% of any amounts collected by Franchisor, its affiliates, or any third-party collection agency to cover Franchisor's internal costs associated with processing collection requests, managing third-party collection agencies, and administering recoveries.
Additionally, Franchisee shall reimburse Franchisor and/or its affiliates for the costs of any litigation related to the enforcement of advertising contracts entered into in connection with the Publication, including without limitation legal and court costs and reasonable attorneys' fees.
For the avoidance of doubt, these costs and fees are separate from and in addition to any Royalties Franchisee must pay on collected amounts.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the franchisee is responsible for reimbursing Belocal and its affiliates for costs incurred to enforce advertising contracts related to the Publication. This includes costs Belocal incurs to collect from advertisers who breach their agreements. Belocal reserves the right to seek payment from advertisers through collection agencies, other collection methods, or lawsuits.
Belocal will retain 7% of any amounts collected by them, their affiliates, or a third-party collection agency. This 7% covers Belocal's internal costs for processing collection requests, managing collection agencies, and administering recoveries.
Furthermore, the franchisee must reimburse Belocal and its affiliates for litigation costs related to enforcing advertising contracts. These costs include legal and court fees, as well as reasonable attorney's fees. These costs and fees are separate from, and in addition to, any royalties the franchisee must pay on collected amounts. This means that even if Belocal has to sue an advertiser to get them to pay, the franchisee is still responsible for covering Belocal's legal expenses, on top of the standard royalty fees.