Under what conditions is a Belocal franchisee prohibited from using artificial intelligence in their business?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- (5) Except as permitted by and in accordance with the Franchise Brand Standards Manual, Franchisee is expressly prohibited from utilizing any form of artificial intelligence ("AI") in the operation, management, or marketing of the Franchised Business or the Publication without Franchisor's express written approval. This prohibition includes, but is not limited to, a prohibition on using AI-driven customer service, data analysis, image generation, text generation, code generation, sound generation, and decision-making tools. Any breach of this provision will be considered a material violation of this Agreement.
I. Disclosure and Franchisee's Investigation of this Franchise.
- (1) Franchisee understands and agrees that Franchisor may operate and change the System and Franchisor's business in any manner that is not expressly and specifically prohibited by this Agreement. Without limitation of the foregoing, Franchisee acknowledges that the products and services to be offered by Franchisee may be supplemented, improved, or otherwise modified from time to time by Franchisor.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, a franchisee is generally prohibited from using any form of artificial intelligence (AI) in their Belocal business. Specifically, the franchisee cannot use AI in the operation, management, or marketing of the franchised business or its publication without the express written approval of Belocal. This prohibition extends to AI-driven customer service, data analysis, image generation, text generation, code generation, sound generation, and decision-making tools.
Belocal retains the right to develop policies and standards regarding the use of AI tools within the franchised business. Unless otherwise specified in these policies, Belocal maintains ownership of all data used as input and output for any AI tools. Therefore, franchisees must obtain prior consent from Belocal before using AI tools, including uploading franchised business data, in connection with their Belocal business or publication.
Violation of the AI usage policy is considered a material breach of the franchise agreement. This means that unauthorized use of AI could lead to significant consequences, potentially including termination of the franchise agreement. Prospective franchisees should carefully review Belocal's AI policies and procedures and seek written clarification on any permitted uses of AI before investing in the franchise.