What triggers the Indemnification fee for a Belocal franchisee?

Based on the 2025 Belocal Franchise Disclosure Document, the circumstances that trigger the indemnification obligations for a franchisee are related to compliance with the company's cross-selling policies, procedures, and guidelines. If a franchisee fails to adhere to these standards, Belocal has the right to terminate the franchisee's right to cross-sell or end the Franchise Agreement. The specific details of what constitutes non-compliance are found in Belocal's policies, procedures, and guidelines related to cross-selling.

Cross-selling involves franchisees selling print advertisements to be included in publications managed by other franchisees or Belocal's affiliates. The FDD outlines a structure for cross-selling fees, where the selling franchisee, receiving franchisee, and managing franchisee each receive a percentage of the cash received for the advertisement. These percentages can be changed by Belocal. To be eligible for any cross-selling fee, a franchisee must comply with Belocal's policies, procedures, and guidelines.

It's important for prospective Belocal franchisees to understand the specific requirements for cross-selling and the potential consequences of non-compliance. Franchisees should carefully review the policies, procedures, and guidelines related to cross-selling to ensure they can meet these obligations. Understanding these requirements is crucial for maintaining a good standing with Belocal and avoiding potential termination of the franchise agreement.