Under what conditions can Belocal increase the fees outlined in Item 6?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, the amounts of the inflation adjustments are cumulative and, if not applied in one year, may be applied in future years. For example, if the COLA adjustment for 2027 were 3%, then in 2027 we could raise each flat fee by up to 3%. However, if we elected to raise a particular flat fee by 1% in 2027, we would have the right to carry forward the additional 2% increase to be applied in a future year. If the COLA adjustment for 2028 were 2%, then, because of the inflation adjustment we did not apply in 2027, we would have the right to increase such flat fee in 2028 by up to 4% (2% for 2028 and 2% for the unapplied adjustment in 2027). If we were to increase such flat fee in 2028 by only 2%, then the remaining 2% adjustment would continue to be available to be applied to increases in such flat fee in future years, and so on.
(8) Each of these fees can be increased upon notice to you; however, the total increase of each fee during the term of the Franchise Agreement will not be more than 25% of the fee currently identified in this Item 6.
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 ability to increase certain fees outlined in Item 6 under specific conditions. Belocal can increase fees upon notice to the franchisee. However, the total increase of each fee during the term of the Franchise Agreement is capped at 25% of the fee currently identified in Item 6.
Belocal can also adjust fees based on inflation. The amounts of inflation adjustments are cumulative, meaning that if an adjustment is not fully applied in one year, the remaining portion can be carried forward and applied in future years. For example, if the COLA adjustment for 2027 were 3%, Belocal could raise each flat fee by up to 3%. If Belocal only raises a fee by 1% in 2027, the remaining 2% increase can be applied in a future year. This carry-forward provision allows Belocal flexibility in managing fee adjustments over time.
For the Administrative Credit Card Fee, Belocal may increase the amount of the fee from time to time, including due to increases in vendor pricing, up to a maximum of 5% of the total amount paid by any third-party via credit card. Belocal must provide 90 days' notice to franchisees before changing the amount of the Administrative Credit Card Fee.
Note 1 states that Belocal may increase fees based on changes in market conditions, the cost of providing services, and future policy changes. However, Belocal states that they have no present plans to increase any fees.