Does Belocal have the right to allow other franchisees to sell advertising in a franchisee's territory?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Y
You will not receive an exclusive territory. You may face competition from other franchisees, from businesses owned by us or our affiliates, or from other channels of distribution or competitive brands that we control.
When you sign the Franchise Agreement, we will grant you the non-exclusive right and license to establish and operate the Franchised Business. You will be granted a non-exclusive geographic area ("Territory") described in Attachment B to the Franchise Agreement, within which you have the right to distribute the Publication. We do not allow you to relocate your Territory. You will not have the right to distribute the Publication to any person, community, or industry group outside of your Territory. You have the right to sell and offer to sell print advertising and digital advertising services to clients located both inside and outside of your Territory, but only in accordance with our then-current digital advertising policies, crossselling policies and Franchise Brand Standards Manual. We also have the right to allow other franchisees or affiliates to offer and sell advertising in all forms to clients located in your Territory.
Your Territory will be defined by geographic boundaries or descriptions we select. We do not grant any minimum territory. The actual size of the Territory will vary depending upon the availability of markets, our long-range plans, your financial and operational resources, and market conditions. A written description of the Territory will be inserted in Attachment B to the Franchise Agreement before you sign the Franchise Agreement. The boundaries used to define the Territory will be geographic boundaries as configured on the effective date of the Franchise Agreement, which may be described as certain neighborhoods, subdivisions, or communities, or a specific home count in an area, as determined by us. We have the sole discretion to change your Territory, including its size, shape, boundaries, and population, upon ninety (90) days' notice to you.
We divide each calendar year into four periods of three months each, and we call these periods "Quarters." For the Publication, we require you to (1) maintain a minimum, monthly Commission for the term of your Franchise Agreement, which is currently at least $3,000 per month for each of the BELOCAL ® publications you manage; (2) include a minimum of 28 pages that meet our standards in each issue of the Publication; (3) include the number of articles each month on the topics required in the Franchise Brand Standards Manual; and (4) complete a minimum number of Qualified Sales (as defined in the Franchise Brand Standards Manual) each Quarter. We may change our minimum Commission, page number, article, Qualified Sales, and Quarter requirements in our discretion during the Term of the Franchise Agreement. Although subject to change, currently the Qualified Sale requirement is that you make three Qualified New Sales (or the sale of a new advertising contract that has a term of at least 12 months and generates Cash Received of at least $150 per month) per Quarter. If you fail to satisfy any of the requirements listed in clauses (1) through (4) above, we may provide you with a business improvement plan ("Business Improvement Plan") with strategies and metrics for returning to compliance. Additionally, you will have various deadlines for the content, review, publishing, approval, etc. of the Publication and you must meet each deadline. Failure to satisfy any of these requirements is a default under the Franchise Agreement and is grounds for termination of the Franchise Agreement.
We also require you to make a minimum number of Qualified Sales in the first sixteen weeks of your operation of the Franchised Business ("Pre-Print Sales Requirement"). Although subject to change, currently the Pre-Print Sales Requirement is that you make at least ten Qualified Sales in the first sixteen weeks of your operation of the Franchised Business. If you fail to satisfy the Pre-Print Sales Requirement, we may provide you with a Business Improvement Plan with metrics and strategies for you to improve your sale of advertising contracts. Failure to successfully complete any Business Improvement Plan is a default under the Franchise Agreement and is grounds for termination of the Franchise Agreement.
Currently, you must include five Staple articles, two Explore Guides, two Points of View articles, one History article, one Hidden Gem article, and twenty Local Tips articles in each issue of the Publication. Staple articles typically feature information for those who recently moved to the area.
Source: Item 12 — TERRITORY (FDD pages 42–44)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal retains the right to allow other franchisees or affiliates to sell advertising within a franchisee's territory. Specifically, Belocal franchisees have the right to sell and offer to sell print advertising and digital advertising services to clients located both inside and outside of their Territory, but only in accordance with Belocal's then-current digital advertising policies, cross-selling policies and Franchise Brand Standards Manual.
This means that a Belocal franchisee's territory is non-exclusive, and they may face competition from other franchisees, businesses owned by Belocal or its affiliates, or other channels of distribution or competitive brands that Belocal controls. This lack of exclusivity is a significant factor for prospective franchisees to consider, as it directly impacts their potential market share and revenue. While franchisees can sell advertising outside their territory, they must adhere to Belocal's policies, and Belocal can change a franchisee's territory with ninety (90) days' notice.
Furthermore, Belocal, its affiliates, and any other authorized person or entity have the right to develop other business systems, advertise any business of The N2 Company or any N2 Franchising, Inc. franchised business anywhere, and engage in the production, distribution, and sale of all forms of advertising and marketing materials without compensating the franchisee, even within the franchisee's territory. This broad reservation of rights by Belocal underscores the importance of understanding the competitive landscape and potential for encroachment on a franchisee's market.
Belocal also owns and operates a digital marketing services business under the trademark "Hyport Digital," and there are no limitations on where Hyport Digital can solicit and sell its goods and services, including within a franchisee's territory. This means that Hyport Digital may sell its goods and services in a franchisee's Territory and to the clients who purchase print advertisements in the Publication. Given these factors, prospective franchisees should carefully evaluate the market conditions and competitive pressures within their assigned territory before investing in a Belocal franchise.