What standards and specifications must a Belocal franchisee comply with regarding supplies, materials, equipment, and other products and services?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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You must comply with all of our standards and specifications relating to the purchase of all supplies, materials, equipment (including computer hardware and software), and other products and services used in the Franchised Business. We formulate our standards and specifications based on a variety of factors and can issue such standards and specifications to you from time to time, including in writing in the Franchise Brand Standards Manual. If we have approved suppliers for any supplies, products, and/or services used or offered by your Franchised Business, you must use those suppliers. We may change the number of approved suppliers at any time and may designate ourselves, an affiliate, or a third party as the exclusive source for any particular item or service. We may profit from your purchases and leases from approved suppliers, and we and/or our affiliates may receive payments, fees, commissions, or reimbursements from such suppliers in respect of your purchases and leases.
Required Purchases
Currently, except as described below, you have no obligation to purchase or lease from us, our affiliates, or other designated third-party suppliers any of the products, services, supplies, fixtures, equipment (including computer hardware and software and payment systems), inventory, or real estate used in establishing or operating your Franchised Business.
Optional Purchases
Our affiliate, The N2 Company, is approved to supply you with optional services for your Franchised Business. Currently, these optional services include client ad strategy services and lead generation services. The service offerings are subject to change. Additional services may be approved while other existing services may be discontinued. To receive these optional services, you must enter into an N2 Franchisee Services Agreement with our affiliate. The current form of N2 Franchisee Services Agreement is attached to this disclosure document as Exhibit F. There are additional fees associated with these optional services. Future optional services may include premium versions of the client ad strategy services, content services, writing and editing services, business strategy coaching, social media management services, administrative services, consulting services, or client care services. This is not an exhaustive list of potential optional services and neither we nor our affiliate is obligated to make any such services available to our franchisees. Our affiliate may establish and change the prices for current and future services in its discretion.
Revenue Derived
Our Directors, Duane Hixon and Earl Seals, have ownership interests in The N2 Company, which is approved to supply you with optional services. Neither we, nor our affiliate, nor any of our respective officers owns an interest in any other privately held suppliers or a material interest in any publicly held suppliers of our franchise system. During our fiscal year July 1, 2024 through June 30, 2025, we received no revenue or other material consideration from required purchases or leases by franchisees. During its fiscal year July 1, 2024 through June 30, 2025, The N2 Company received no revenue from our franchisees' required purchases or leases.
Requirements for Specific Goods and Services
Technology: At our option, we may make available to you, for a fee, software developed by us, our affiliates, or a designated third party for the Franchised Business. We are not required to develop or acquire such software programs. These software programs assist with client relationship management, sales order and commission management, and Publication production management.
Signage: If you display signage at your Office location, it must comply with our specifications and standards, which we will issue to you upon request.
Business Cards: You must use the third-party provider we designate to purchase your business cards.
Digital Signature Software: We require you to use our approved vendors for digital signature software. You must not use any digital signature software we have not approved.
Insurance: You must obtain and maintain in full force and effect the levels of insurance specified in the Franchise Agreement and the Franchise Brand Standards Manual or applicable law. At a minimum, you must carry (i) Comprehensive General Liability Insurance, including broad-form contractual liability, broad-form property damage, personal injury, advertising injury, completed operations, products liability, and fire damage coverage, in the amount of $2,000,000 combined single limit per occurrence and $4,000,000 general aggregate; (ii) automobile liability coverage, including coverage of owned, non-owned, and hired vehicles, with coverage in amounts not less than $300,000 combined single limit; (iii) event insurance for each event you host or sponsor in connection with the Publication in the amount of $1,000,000 per occurrence, $2,000,000 in the aggregate, regardless of where the event is located; and (iv) such other insurance as may be required by the state or locality in which you operate the Franchised Business. All policies must be acceptable to us. From time to time in our sole discretion, we may increase or modify such limits of liability or require additional types of coverage. In each of these policies, except for workers' compensation (if applicable), you agree to name us and our affiliates, and the officers, directors, shareholders, partners, agents, representatives, independent contractors, servants, and employees of each of them, as additional insureds (each, an "Additional Named Insured"), which will expressly protect both you and each Additional Named Insured and will require the insurer to defend both you and each Additional Named Insured in any action while reserving the right of each Additional Named Insured to involve counsel of their own choosing in protection of their own and system-wide interests. Additionally, your insurance policy must waive on behalf of the insurer any right of subrogation by the insurance company against us, the Additional Named Insureds, our officers, shareholders, and employees. Your insurance must apply as primary and non-contributory.
Advertising Materials: You must obtain our prior approval for all advertising and promotional plans and materials that you desire to use to promote your Franchised Business and that we have not prepared or previously approved. We will approve or disapprove such plans and materials within 14 days from the date we receive your plans and materials. We reserve the right to disapprove at any time any plans and materials we have previously approved, and you must promptly discontinue using any promotional or advertising plans or materials upon notice from us to do so.
Social Media Management: If you hire a third-party to manage your social media, you must use only our approved social media management vendors.
Other Services: We have the right to require you to use only our approved vendors for client relationship management, advertisement strategy, photography, and advertisement material creation services. Our current policy is to allow our franchisees to use publishing assistants or vendors that we have not approved in advance, provided the assistants or vendors comply with the standards set forth in our Franchise Brand
Standards Manual.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 33–35)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees must adhere to Belocal's standards and specifications for all supplies, materials, equipment (including computer hardware and software), and other products and services used in their franchised business. These standards are based on various factors and may be issued in writing, including in the Franchise Brand Standards Manual. If Belocal has approved suppliers, franchisees are required to use them, though Belocal can change the number of approved suppliers or designate itself, an affiliate, or a third party as the exclusive source for any item or service. Belocal may also profit from franchisee purchases from approved suppliers.
If a franchisee wishes to use a service, vendor, supplier, or item not currently approved, they must notify Belocal in writing and submit specifications, photographs, samples, or other requested information. Belocal may inspect the supplier's facilities, software, security systems, or procedures. Belocal will then determine whether the item or supplier meets their standards, typically within 45 days, although this timeframe can vary. Belocal is not obligated to approve any particular item or supplier, even if they meet the criteria, and can revoke approval of any item or supplier that fails to continue meeting their standards, providing 60 days' prior written notice. The franchisee may be required to pay or reimburse Belocal for reasonable expenses incurred during the supplier/item approval process, regardless of whether approval is granted.
Belocal also has specific requirements for certain goods and services. Franchisees must use Belocal's designated third-party provider for business cards and approved vendors for digital signature software. For advertising materials, franchisees must obtain prior approval from Belocal for any plans and materials not prepared or previously approved by Belocal, who will approve or disapprove within 14 days. Belocal can also disapprove previously approved plans and materials, which the franchisee must then discontinue using. If a franchisee hires a third party to manage social media, they must use only Belocal's approved social media management vendors. Belocal has the right to require franchisees to use only their approved vendors for client relationship management, advertisement strategy, photography, and advertisement material creation services.
Franchisees are also required to obtain and maintain specific levels of insurance, including Comprehensive General Liability Insurance ($2,000,000 combined single limit per occurrence and $4,000,000 general aggregate), automobile liability coverage ($300,000 combined single limit), and event insurance ($1,000,000 per occurrence, $2,000,000 in the aggregate). All policies must be acceptable to Belocal, who may increase or modify the limits or require additional coverage. Belocal and its affiliates must be named as additional insureds on these policies, and the policies must waive any right of subrogation against Belocal. Belocal estimates that initial required purchases from them, their affiliates, or approved suppliers will be less than 3% of the initial investment, while ongoing required purchases will be 50% or more of annual purchases or leases.