Is a transfer by operation of law 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. Any ownership or structural changes in Franchisee (including but not limited to, any merger; reorganization; transfer of shares, stock, or interests among owners; or issuance of additional shares or classes of stock or additional partnership interests) shall constitute and be deemed a transfer.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a transfer by operation of law is considered a transfer of the franchise agreement. Belocal requires franchisees to obtain prior written consent from Belocal for any transfer or assignment of the franchise agreement.
The FDD defines "transfer" broadly, explicitly including transfers by operation of law. This means any transfer of the franchise agreement, even if it occurs automatically due to circumstances like bankruptcy, judicial order, or other legal processes, is subject to Belocal's approval.
Any transfer made without Belocal's consent is considered a material breach of the franchise agreement and will be deemed null and void. Therefore, prospective Belocal franchisees should understand that they cannot transfer their franchise through any means, including legal or involuntary actions, without first obtaining Belocal's approval.