Is a transfer by operation of law or otherwise, whether direct or indirect, voluntary or involuntary, considered a transfer of the Belocal franchise agreement?

According to Belocal's 2025 Franchise Disclosure Document, a transfer of the franchise agreement encompasses a broad range of scenarios. The document explicitly states that the term "transfer" includes any issuance, sale, assignment, gift, pledge, mortgage, or any other encumbrance. This definition extends to transfers occurring through bankruptcy, judicial order, merger, consolidation, share exchange, or by operation of law, regardless of whether they are direct, indirect, voluntary, or involuntary.

This comprehensive definition means that any change in ownership or structural changes within the franchisee's organization are also considered a transfer. This includes mergers, reorganizations, transfers of shares or stock among owners, or the issuance of additional shares or classes of stock or additional partnership interests. Essentially, any event that alters the control or ownership of the franchise business is deemed a transfer under the franchise agreement.

For a prospective Belocal franchisee, this has significant implications. It means that any intended change in the business's ownership structure, even if not a direct sale, requires the franchisor's prior written consent. Failure to obtain this consent renders the transfer null and void and constitutes a material breach of the agreement. Therefore, franchisees must be diligent in seeking approval for any ownership or structural changes to avoid violating the terms of their franchise agreement with Belocal.