Under what conditions can Belocal implement or change the Ad Design Royalty?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) All fees and expenses in this Item 6 are non-refundable and, unless otherwise indicated in the preceding chart, are imposed uniformly by us, collected by us, and are payable to us. Except as otherwise noted, we may increase these fees based on changes in market conditions, our cost of providing services, and future policy changes, but we have no present plans to increase any fees. We do not currently require you to participate in, nor have we created, any cooperatives.
- (2) This franchise opportunity is a commission-based program. For each Publication you manage, you will receive a Commission that equals:
- (i) For any print advertisement you sell for inclusion in the Publication, the amount equal to the total Cash Received (as defined below) for the Publication in the applicable month; minus the Royalty (set forth in the preceding chart) for the Publication for the applicable month; minus the Publication Expense (set forth in the preceding chart) for the Publication for the applicable month; plus
- (ii) For any print advertisement you sell for inclusion in a publication managed by another franchisee or by our affiliate, as applicable, (x) the amount equal to our then-current Outgoing Cross-Selling Fee (set forth in the preceding chart), divided by the total number of publications you manage, or (y) the Pre-print Commission (as defined below), divided by the total number of publications you manage; plus
- (iii) For any print advertisement another franchisee or our affiliate sells for inclusion in the Publication, the amount equal to our then-current Receiving Cross-Selling Fee (set forth in the preceding chart); plus
- (iv) The amounts paid by advertisers for the Extended Reach services and allocated to the Publication;
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal has the authority to modify fees based on market conditions, the cost of providing services, and future policy changes. This includes the Ad Design Royalty, which is factored into the commission franchisees receive for each publication they manage. The commission is calculated by subtracting the royalty and publication expenses from the total cash received for print advertisements.
Belocal's ability to change fees is subject to certain limitations. For flat fees, Belocal can adjust the amount to account for inflation, increasing each flat fee up to the yearly cost-of-living adjustment (COLA) percentage identified by the United States Social Security Administration or a similar metric of inflation. This adjustment can occur up to one time per calendar year.
Prospective Belocal franchisees should be aware that these changes can impact their commission earnings. While Belocal does not currently have plans to increase any fees, the possibility exists, and franchisees should factor this into their financial projections. It is important for franchisees to stay informed about market conditions and any policy changes that could affect the fees and royalties they pay.