Does Belocal have any restrictions on transferring its rights under the Franchise Agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
)
| Provision | Section in Franchise Agreement | Summary |
|---|---|---|
| manipulates, corrupts, or improperly modifies the IT Systems or any data stored therein; or (iv) transfers, copies, or discloses any data from the IT Systems except as expressly permitted under the Franchise Agreement; other defaults that are incapable of being cured. A provision in the Franchise Agreement which terminates the Franchise Agreement upon your bankruptcy may not be enforceable under Title 11, United States Code Section 101. Franchisor has a step-in right upon default. | ||
| i. Franchisee's obligations on termination/nonrenewal | Sections 7. and 11. | Comply with wind-down obligations; pay us wind-down damages, if applicable; stop using our Marks, Copyrighted Materials, and confidential information; return the Franchise Brand Standards Manual and Copyrighted Materials; stop operating the Franchised Business and do not represent yourself as a current franchisee; pay amounts due; at our option, assign to us your business directory listings and the Online Presences; grant us control of any Online Presence; comply with our instructions regarding the Technology and Franchised Business Data; comply with confidentiality, non- competition, and non solicitation covenants; pay us all costs, damages, and expenses we incur because of your defaults or resulting from or subsequent to the termination of the agreement (including enforcement of provisions). |
| j. | Section 9.A. | We may transfer our rights without restriction. |
| Assignment of | ||
| contract by franchisor | ||
| k. "Transfer" by franchisee – defined | Section 9.B. | You and your Principals must not transfer any rights or obligations under the Franchise Agreement, any assets of your Franchised Business, or any direct or indirect interest in you except in compliance with the Franchise Agreement. "Transfer" means any issuance, sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation share exchange, transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 49–55)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal has the right to transfer its rights without any restrictions. This means Belocal can freely assign the Franchise Agreement to another party without needing the franchisee's consent or meeting specific conditions.
For a prospective franchisee, this signifies that the entity they initially contracted with could change at any time. The new entity taking over the franchisor's role might have different management styles, priorities, or financial capabilities, which could impact the Belocal franchise system.
While Belocal has no restrictions, franchisees are restricted from transferring any rights or obligations under the Franchise Agreement, any assets of their Franchised Business, or any direct or indirect interest in them except in compliance with the Franchise Agreement. 'Transfer' includes any issuance, sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation share exchange, transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary. Franchisees must notify Belocal with a notice of transfer, and Belocal must give written consent to a transfer by the franchisee or their Principals, and all transfers must meet certain conditions.
These conditions include the franchisee paying all amounts due, not being in default, signing a general release (subject to state law), paying a transfer fee, and remaining liable for pre-transfer obligations. Any Transferee must meet Belocal's criteria, complete required training, meet Belocal's guaranty obligations, make certain representations, and enter into Belocal's then-current franchise agreement. Belocal also has the right of first refusal to acquire the franchisee's business and can match any purchase offer the franchisee wants to accept for their Franchised Business.