Under the Belocal franchise agreement, what is the consequence if a Belocal franchisee otherwise ceases operations of the Franchised Business?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- C.
Termination on Notice; No Cure.
Franchisor may terminate this Agreement immediately upon written notice to Franchisee, without an opportunity to cure, if:
(1) Franchisee abandons or otherwise ceases operations of the Franchised Business contemplated by this Agreement;
(1) Immediately cease to conduct operations of the Franchised Business and cease holding themselves out as a franchisee (or a principal of a franchisee) of Franchisor (except for purposes of disclosing past experience on a resume);
(2) Promptly discontinue all use of the Marks, Copyrighted Materials, and Confidential Information and take appropriate action to return to Franchisor, or deliver to the transferee if Franchisor so designates, all Copyrighted Materials and Confidential Information in Franchisee's possession or within its control;
- (3) Pay all amounts due under this Agreement;
(4) Pay to Franchisor all damages, costs, and expenses, including reasonable attorney's fees and enforcement costs, incurred by Franchisor in connection with any of Franchisee's default(s) under this Agreement;
- (5) Comply with the covenants set forth in Section 7.;
(6) At Franchisor's option, assign to Franchisor, or if applicable, the transferee, all rights, control, and access to any business listings and Online Presences (including accounts, credentials, and login information) and telephone numbers (including personal cellphone numbers) related to or associated with the Franchised Business and execute all forms and documents required by Franchisor to transfer such items to Franchisor or, if applicable, the transferee. Franchisee agrees to use different telephone numbers, business listings, and Online Presences in connection with any subsequent business conducted by Franchisee. Franchisor has the right to prohibit Franchisee's continued control of, use of, or access to such Online Presences;
(8) Pay in full all of the creditors and suppliers of the Franchised Business and/or the Publication within 15 days after the expiration or termination of this Agreement; and
(9) Pay to Franchisor all damages, costs, and expenses, including reasonable attorneys' fees and lost profits, incurred by Franchisor as a result of or subsequent to the termination or expiration of this Agreement, including costs and expenses related to obtaining injunctive or other relief for the enforcement of any provisions of this Section 11.
For the avoidance of doubt, Franchisee has an obligation to continue to operate the Franchised Business until the effective date of termination.
If Franchisee abandons the Franchised Business prior to the effective date of termination established by Franchisor or fails to comply with the wind-down procedures in the Franchise Brand Standards Manual, Franchisee shall be in default under this Agreement and Franchisor shall have the right to immediately terminate this Agreement and charge the Wind-Down Damages.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, if a franchisee abandons or otherwise ceases operations of the franchised business, Belocal can terminate the franchise agreement immediately by providing written notice, without offering an opportunity to cure the breach.
Furthermore, the franchisee must immediately cease operations, stop representing themselves as a Belocal franchisee, and discontinue all use of Belocal's trademarks, copyrighted materials, and confidential information. The franchisee is also obligated to return all copyrighted materials and confidential information to Belocal or its designee.
In addition to these immediate actions, the franchisee is responsible for paying all outstanding amounts due under the franchise agreement, as well as any damages, costs, and expenses, including reasonable attorney's fees, incurred by Belocal due to the franchisee's default. The franchisee must also comply with specific covenants outlined in Section 7 of the agreement. Belocal also has the option to take control of the franchisee's business listings, online presence, and telephone numbers associated with the franchised business. The franchisee is also obligated to pay all creditors and suppliers of the franchised business within 15 days of termination and cover all damages, costs, and expenses incurred by Belocal as a result of the termination, including legal fees and lost profits. Belocal also states that the franchisee has an obligation to continue to operate the Franchised Business until the effective date of termination. If the franchisee abandons the Franchised Business prior to the effective date of termination established by Belocal or fails to comply with the wind-down procedures in the Franchise Brand Standards Manual, the franchisee shall be in default under this Agreement and Belocal shall have the right to immediately terminate this Agreement and charge the Wind-Down Damages.