Is a transfer by judicial order considered a transfer of the Belocal franchise agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this Agreement, the term "transfer" shall mean any issuance, sale, assignment, gift, pledge, mortgage or any other encumbrance, transfer by bankruptcy, transfer by judicial order, merger, consolidation share exchange, or transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a transfer by judicial order is considered a transfer of the franchise agreement. Belocal defines "transfer" broadly to include various scenarios where the franchise changes hands or ownership.
Specifically, the term "transfer" encompasses not only voluntary actions like sales or assignments but also involuntary actions such as transfers resulting from bankruptcy or judicial orders. This means that if a court orders the transfer of the franchise, it is treated as a transfer under the franchise agreement.
This definition has significant implications for a Belocal franchisee. Any change in ownership, whether voluntary or involuntary, requires the franchisor's prior written consent. Furthermore, any transfer that violates the agreement is considered a material breach, potentially leading to termination of the franchise agreement. Therefore, franchisees need to be aware that any event leading to a change in ownership, including legal proceedings, must be disclosed to and approved by Belocal.