Under what circumstances can Belocal assume management of the Franchised Business due to the death or disability of the Franchisee or a Principal?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (3) Not in lieu of any additional rights Franchisor may have, upon death or disability of Franchisee or a Principal, Franchisor may, but shall not be obligated to, assume the management of the Franchised Business (or appoint a party to assume its management) until the transfer pursuant to Section 9.E(1) is completed. The terms and conditions for the exercise of Franchisor's step-in right are set forth in Section 12.E.
- F. Transfer Damages. If Franchisee or any of its Principals engages in a transfer without first complying with the applicable transfer provisions of this Agreement (including, without limitation, the provisions of this Section 9), Franchisee agrees to pay Franchisor, within 15 days of receiving notice from Franchisor, in addition to the amounts owed under this Agreement, transfer damages equal to the greater of (a) 15% of the price paid by the transferee to Franchisee or any Principal, as applicable; or (b) $25,000 ("Transfer Damages"). The parties to this Agreement acknowledge and agree that it would be impracticable to determine precisely the damages that Franchisor would incur from any unauthorized transfer of this Agreement. The parties consider this Transfer Damages provision to be a reasonable, goodfaith estimate of those damage
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal has the option, but not the obligation, to assume management of the Franchised Business if the Franchisee or a Principal dies or becomes disabled. This arrangement can continue until the transfer of the business is completed according to Section 9.E(1) of the franchise agreement. Alternatively, Belocal can appoint another party to manage the business during this interim period.
The term "disability" is defined as a mental or physical condition that prevents the Franchisee or a Principal from operating the Belocal franchise as required by the agreement and the Franchise Brand Standards Manual, or from fulfilling their obligations under these documents. During the period following the death or disability but before the transfer is complete, the business must continue to operate according to the franchise agreement terms. The executor, administrator, conservator, guardian, or other personal representative has 30 days to appoint a manager for the business, unless a manager was previously appointed and remains in place.
Any newly appointed manager must complete Belocal's standard training program at the Franchisee's expense, sign Belocal's confidentiality and non-solicitation agreement, and meet any other requirements Belocal has for managers at that time. This ensures that the business continues to operate under competent management and in compliance with Belocal's standards during the transition period. The terms and conditions for Belocal's step-in rights are detailed in Section 12.E of the franchise agreement.