Under what condition related to the remaining term of the agreement will Belocal transfer the agreement to an unaffiliated third party?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (2) If Franchisor transfers or assigns this Agreement to an unaffiliated third-party purchaser in connection with the sale of the entire N2 publication(s) franchising business, and if, as of the date of such transfer or assignment, the remaining Term of this Agreement is less than 540 days, then, prior
to or contemporaneously with the closing of such transfer or assignment, Franchisor shall, at Franchisee's option, enter into an amendment to this Agreement with Franchisee pursuant to which the then-existing Term of this Agreement shall be extended so that it expires on the date which is 540 days from the closing date of such transfer or assignment. Nothing in this Section 9.A.(2) limits or otherwise affects Franchisor's right to transfer or assign this Agreement as provided in Section 9.A.(1).
- B. By Franchisee.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal has the right to transfer the franchise agreement to an unaffiliated third party under specific conditions related to the remaining term of the agreement. If Belocal sells its entire franchising business to an unaffiliated third party, and the remaining term of the franchise agreement is less than 540 days as of the transfer date, Belocal will offer the franchisee an amendment to extend the term.
This amendment would extend the agreement so that it expires 540 days from the closing date of the transfer. This provision ensures that franchisees have a minimum term length remaining if the franchise system is sold. However, Belocal's right to transfer or assign the agreement is not limited or affected by this condition.
For a prospective franchisee, this means that if Belocal decides to sell the entire franchise system, Belocal is obligated to extend the agreement to ensure at least 540 days remain in the term. This provides some security for the franchisee, ensuring they have a reasonable amount of time to continue operating their franchise even under new ownership. Franchisees should confirm how this extension might affect other aspects of their agreement, such as renewal options or territory rights.