Is there a limit to the expenses Belocal can incur when responding to a customer complaint?
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, there is no stated limit to the expenses that Belocal can incur when responding to a customer complaint. The FDD states that if an advertiser, client, or third party complains to Belocal and the franchisee fails to satisfactorily remedy the complaint, the franchisee will pay Belocal's costs and expenses associated with their response to and any resolution of the complaint.
This means that a Belocal franchisee could potentially face unpredictable and uncapped expenses related to customer complaints if they are unable to resolve the issue themselves. The "Customer Complaint Fee" is uncapped and is based on Belocal's costs and expenses. This fee is due on demand.
Prospective franchisees should carefully consider this open-ended liability and inquire with Belocal about the typical range of these expenses and the types of complaints that might trigger such fees. Understanding the potential scope of these costs is crucial for assessing the financial risks associated with a Belocal franchise.