What triggers the start of the two-year non-solicitation period for a covenantor of a Belocal franchise?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
In order to protect the Confidential Information, the Marks, the goodwill of the System, and the legitimate business interests of the Franchised Business, Covenantor agrees that, for a period of two years following the earlier of (i) the termination of Covenantor's business relationship with Franchisee (regardless of the reason for such termination), or (ii) the termination, expiration, or transfer of Franchisee's interest in the Franchise Agreement (regardless of the reason for termination, expiration, or transfer), Covenantor will not, without Franchisor's prior written consent or as permitted under valid franchise agreements with Franchisor, solicit or attempt to solicit, using any form of oral, written, or electronic communications, Franchisor's, Franchisor's affiliate, or Franchisee's current or prospective business advertisers with whom Covenantor interacted during the twelve-month period prior to the termination of Covenantor's business relationship or the termination, expiration, or transfer of Franchisee's interest in the Franchise Agreement, for the purpose of soliciting, offering, or accepting Competitive Services.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the two-year non-solicitation period for a covenantor begins upon the earlier of two events. These events are the termination of the covenantor's business relationship with the Belocal franchisee, regardless of the reason for termination, or the termination, expiration, or transfer of the franchisee's interest in the Franchise Agreement, regardless of the reason for termination, expiration, or transfer.
During this two-year period, the covenantor is restricted from soliciting or attempting to solicit, through any form of communication, Belocal's, its affiliates, or the franchisee's current or prospective business advertisers. This restriction applies only to advertisers with whom the covenantor interacted during the twelve-month period prior to the termination of their business relationship or the termination, expiration, or transfer of the Franchise Agreement. The purpose of this restriction is to prevent the covenantor from soliciting, offering, or accepting competitive services.
This non-solicitation clause is designed to protect Belocal's confidential information, trademarks, the goodwill of the system, and the legitimate business interests of the franchised business. It ensures that a departing covenantor cannot unfairly leverage their knowledge and relationships gained during their time with the franchise to compete against Belocal. Prospective franchisees should carefully review these restrictions and understand their implications, especially if they plan to pursue other business ventures after leaving the Belocal system.