Can Belocal transfer the agreement even if the remaining term is less than 540 days?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Franchisor has the right to transfer or assign this Agreement and all or any part of its rights or obligations herein to any person or legal entity without prior notice to, or the consent of, Franchisee. Upon any such transfer or assignment, the transferee or assignee shall be solely responsible for all of Franchisor's obligations arising hereunder subsequent to the transfer or assignment.
- (2) If Franchisor transfers or assigns this Agreement to an unaffiliated third-party purchaser in connection with the sale of the entire N2 publication(s) franchising business, and if, as of the date of such transfer or assignment, the remaining Term of this Agreement is less than 540 days, then, prior
to or contemporaneously with the closing of such transfer or assignment, Franchisor shall, at Franchisee's option, enter into an amendment to this Agreement with Franchisee pursuant to which the then-existing Term of this Agreement shall be extended so that it expires on the date which is 540 days from the closing date of such transfer or assignment. Nothing in this Section 9.A.(2) limits or otherwise affects Franchisor's right to transfer or assign this Agreement as provided in Section 9.A.(1).
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal has the right to transfer the franchise agreement to another party without needing the franchisee's consent. If Belocal sells the entire franchising business to an unaffiliated third party and the remaining term of the agreement is less than 540 days at the time of the transfer, Belocal will offer the franchisee an amendment to extend the term to 540 days from the closing date, at the franchisee's option. However, this does not limit Belocal's right to transfer the agreement under other circumstances.
This means that Belocal retains significant flexibility in managing its franchise network and potentially selling its business. For a franchisee, this signifies a degree of uncertainty, as the terms of the agreement could be subject to change if a transfer occurs. However, the franchisee has the option to extend the agreement to 540 days if the remaining term is less than that when Belocal sells to a third party.
It is important for a prospective Belocal franchisee to understand the conditions under which Belocal can transfer the agreement and the franchisee's rights in such a situation. While Belocal must offer an extension to 540 days if the remaining term is shorter during a sale of the entire franchise system, the franchisee should clarify what other scenarios might lead to a transfer and how those transfers could affect their business operations and the franchise agreement's terms.