Does Belocal specify the form of demand for the Wind-Down Damages?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Management Fee | 45% of monthly Cash Received, plus any expenses we incur in managing the Franchised Business | Monthly | Only payable in the event we must operate your franchise due to death, disability, defaults etc. The Management Fee is in addition to other fees due to us. |
| Customer Complaint Fee | Our costs and expenses associated with our response to and any resolution of a complaint | On demand | If an advertiser, client, or third party complains to us and you fail to satisfactorily remedy the complaint, you will pay us our costs and expenses associated with our response to and any resolution of the complaint. |
| Wind-Down Damages | An amount equal to the greater of (a) 6 months' worth of the average Royalty you paid for the 12 months prior to the default or (b) $2,500 | On demand | Only payable if you fail to comply with the wind-down procedures or abandon the Franchised Business. |
| Transfer Damages | Greater of 15% of transfer price or $25,000 | Within 15 days of our demand | You will pay these transfer damages if you do not comply with the transfer terms under the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the Wind-Down Damages are payable "on demand" if a franchisee fails to comply with wind-down procedures or abandons the franchised business. The FDD does not specify the form that this demand must take. It does not state whether the demand must be written, electronic, or if a verbal request is sufficient.
In practical terms, this means that Belocal has the right to request Wind-Down Damages from the franchisee if the franchisee does not follow the proper procedures when closing the business or if the franchisee abandons the business. The amount of these damages will be the greater of (a) 6 months' worth of the average Royalty the franchisee paid for the 12 months prior to the default, or (b) $2,500.
Because the FDD does not specify the form of demand, a prospective Belocal franchisee should seek clarification from the franchisor regarding what constitutes an acceptable demand for payment. Understanding the required format, such as whether a written notice is necessary, can help a franchisee avoid potential disputes over the legitimacy of the demand and ensure they are prepared to address such requests appropriately.