Is selling digital advertising for publications that compete with Belocal publications considered a 'Competitive Business'?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
(B) The term "Competitive Business" includes the following divisible and severable business lines or services (each, a "Competitive Service") which the Franchisee's Franchised Business of which Covenantor is a part provided (i) for covenants applicable during the term of the Covenantor's business relationship with Franchisee or the Franchised Business, at any time during that relationship and (ii) for covenants applicable after the term of the Covenantor's relationship with Franchisee or the Franchised Business, at any time within the twelve-month period prior to the termination of the Covenantor's business relationship with the Franchised Business or the termination, expiration, or transfer of the Franchisee's Franchise Agreement:
(i) selling digital and/or print advertising to businesses for publication in or related to digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(ii) publishing and/or facilitating the publishing of digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
(iii) developing relationships among members of Communities within the Territory, or members of Industry Groups within the Territory and within ten miles of the Territory, for the purpose of selling or marketing digital or print publications that compete with any N2 publication(s), including BELOCAL publications;
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, selling digital advertising for publications that compete with Belocal is considered a 'Competitive Business.' Specifically, the FDD defines 'Competitive Business' to include selling digital and/or print advertising to businesses for publication in or related to digital or print publications that compete with any N2 publication(s), including BELOCAL publications. This definition applies both during the term of the franchise agreement and, for certain covenants, for a 12-month period after termination, expiration, or transfer of the agreement.
This means that as a Belocal franchisee, you are restricted from engaging in such activities, as they are seen as directly competitive to the Belocal franchise. The restrictions apply not only to selling advertising for competing publications but also to publishing or facilitating the publishing of competing publications, developing relationships to market competing publications, and organizing events to promote competing publications. The FDD also includes offering or selling digital marketing and advertising services already offered by Belocal as a competitive business.
These restrictions are in place to protect Belocal's market position and goodwill. The franchise agreement states that these covenants contain reasonable limitations regarding time, geographical area, and scope of activity. Franchisees and principals agree that these restrictions do not impose a greater restraint than necessary to protect Belocal's legitimate business interests. A prospective franchisee should carefully consider these restrictions and how they might impact their business activities, both during and after the franchise term.