After the termination, expiration, or transfer of the Belocal franchise agreement, what is the look-back period for determining which Competitive Services are covered by the non-compete covenants?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
The term "Competitive Business" includes the following divisible and severable business lines or services (each a "Competitive Service") which the Franchisee's Franchised Business provided (a) for covenants applicable during the Term, during the Term and (b) for covenants applicable post-term, at any time within the twelve-month period prior to the termination, expiration, or transfer of this 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;
(iv) organizing, sponsoring, or hosting events for advertisers in the Publication or 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, or digital or print advertising in digital or print publications, that compete with any N2 publication(s); or
(v) offering or selling digital marketing and advertising services which are offered or sold by Franchisor or its affiliates or are or were offered and sold by Franchisee.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the non-compete covenants applicable after the termination, expiration, or transfer of the franchise agreement consider the Competitive Services provided by the franchisee's Belocal business within a specific timeframe. This timeframe is the twelve-month period prior to the termination, expiration, or transfer of the Franchise Agreement. This look-back period is used to determine which business lines or services the franchisee is restricted from engaging in post-termination.
Specifically, the term "Competitive Business" includes business lines or services that the franchisee's Belocal business provided at any time within this twelve-month window. These Competitive Services include selling digital or print advertising that competes with N2 publications (including Belocal publications), publishing or facilitating the publishing of competing digital or print publications, developing relationships to market competing publications, organizing events to market competing publications, and offering or selling digital marketing and advertising services similar to those offered by Belocal.
For a prospective Belocal franchisee, this means that the scope of the post-term non-compete is directly tied to the services they actively provided in their Belocal franchise during the year leading up to the end of their agreement. If a franchisee ceased offering a particular service more than twelve months before termination, they would likely not be restricted from offering that service post-termination. However, any service offered within that twelve-month window could trigger the non-compete restrictions. This clause ensures that franchisees cannot immediately leverage their recent Belocal experience and resources to directly compete with the franchisor after leaving the system.