Does Belocal have the right to allow others to sell advertising in a franchisee's territory?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
. Franchisor has the right to allow other franchisees, affiliates of Franchisor, or any other party Franchisor deems appropriate to offer and sell advertising in any forms to clients located in Franchisee's Territory, without any liability to Franchisee. Franchisee shall obtain Franchisor's prior written consent before organizing an event that occurs more than 25 miles from Franchisee's Territory.
- B. Reserved Rights. The rights granted to Franchisee under this Agreement are nonexclusive, and Franchisee is not granted any territorial rights or other protection. Accordingly, Franchisor, its affiliates, and any other authorized person or entity shall, without limitation, have the right (1) to develop and establish other business systems (including systems that distribute products or services similar to those offered by the Franchised Business) using the Marks, or other names or marks, and to grant licenses to use those systems at any location without providing any rights to Franchisee; (2) to advertise and promote any N2 publications, N2 Co. businesses, and the businesses of Franchisor's franchisees, anywhere; (3) to operate, and license others to operate, any Franchised Business, N2 publication franchised businesses, or any business of any of Franchisor's affiliates, anywhere, including locations that are inside, adjacent to, or surrounded by Franchisee's Territory; and (4) to engage, directly or indirectly, at wholesale, retail, or otherwise, in the production, distribution, license, and sale of all forms (including electronic forms) of magazines, newsletters, advertising, marketing, graphic and web design, or other services and products, under the Marks, or under other names or marks, at any location, including in the Territory, through any method of distribution, including, but not limited to, mail order catalogs and the Internet, regardless of the proximity to, or the competitive impact on, the Franchised Business. Franchisor has the sole discretion to change Franchisee's Territory, including its size, shape, boundaries, and population, upon ninety (90) days' notice to Franchisee.
- C. Cross-publication Advertising. Notwithstanding anything to the contrary herein, Franchisee acknowledges and agrees that other persons or entities may sell advertising for the Publication. These other persons or entities include, without limitation, Franchisor, Franchisor's affiliates, and other franchisees. In accordance with Franchisor's then-current cross-selling policies, Franchisee may have the opportunity to sell advertising for other N2 publications.
D. Hyport Digital Sales. Franchisor hereby grants Franchisee the conditional, non-exclusive right and license to, and Franchisee hereby accepts the right and option to solicit leads for and facilitate client relationships with Hyport Digital. Franchisee acknowledges and agrees that Franchisee may be required to complete and obtain certifications and training and meet other standards set forth in the Franchise Brand Standards Manual in order to qualify to conduct some or all of the foregoing activities. Franchisee acknowledges and agrees that the foregoing activities are optional and not required under the terms of this Agreement. Franchisee acknowledges and agrees that its opportunity to solicit leads for and facilitate client relationships with Hyport Digital is subject to all of the terms of this Agreement and standards in the Franchise Brand Standards Manual and is part of its operations of the Franchised Business. If Franchisee fails to comply with any requirements pertaining to Hyport Digital, including without limitation, its goods, services, clients, operations, and trademarks, Franchisee shall be in default under this Agreement. Franchisee's rights to solicit leads for and facilitate client relationships with Hyport Digital are conditioned upon Franchisor maintaining the Hyport Digital sales program.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal retains the right to allow other parties to sell advertising within a franchisee's territory. Specifically, Belocal can authorize other franchisees, its own affiliates, or any other party it deems appropriate to offer and sell advertising to clients located within a franchisee's territory. This can be done without any liability to the franchisee. This means that even though a franchisee is granted a territory, Belocal can allow others to compete for advertising clients within that same territory.
This aspect of the franchise agreement significantly impacts a franchisee's potential revenue and market share. While the franchisee has the right to solicit advertisers both inside and outside their territory, Belocal's right to authorize others to sell advertising within the franchisee's territory creates a competitive environment. The franchisee's success is therefore not solely dependent on their own efforts but also on Belocal's decisions regarding allowing other parties to operate in the same area.
Furthermore, the FDD states that other persons or entities, including Belocal, Belocal's affiliates, and other franchisees, may sell advertising for the Publication. This is reinforced by the statement that the rights granted to the franchisee are nonexclusive, and the franchisee is not granted any territorial rights or other protection. This lack of exclusivity and territorial protection is a critical point for prospective franchisees to consider, as it directly affects their ability to establish and maintain a client base within their designated territory.
In addition to Belocal's right to allow others to sell advertising in the franchisee's territory, Belocal and its affiliates also have the right to place national, regional, or local advertisements or advertising inserts that have been solicited and obtained by Belocal, Belocal's affiliates, or a third party, without the franchisee's involvement, in the Publication. The franchisee has no right to review or approve the form or content of such Corporate Ads. Belocal may, but is not required to, pay the franchisee a commission with respect to any Corporate Ad.