Under the Belocal franchise agreement, what constitutes a 'final judgment' that, if unsatisfied, triggers automatic termination for a Belocal franchisee?

According to Belocal's 2025 Franchise Disclosure Document, a 'final judgment' that remains unsatisfied or of record for 30 days or longer can trigger automatic termination of the franchise agreement. However, this termination is avoidable if the franchisee files a supersedeas bond.

In practical terms, this means that if a Belocal franchisee loses a lawsuit and a court issues a final judgment against them, they must satisfy that judgment (i.e., pay the amount owed) promptly. If the judgment remains unpaid for 30 days, Belocal has the right to automatically terminate the franchise agreement. This could lead to the franchisee losing their business and the rights to operate under the Belocal brand.

The exception to this rule is the filing of a supersedeas bond. This type of bond is typically obtained to stay the enforcement of a judgment while an appeal is pending. By filing a supersedeas bond, the Belocal franchisee can prevent the automatic termination of the franchise agreement while they pursue an appeal of the judgment. This provides a crucial safeguard for franchisees who believe the judgment against them was wrongly decided.

It is important for prospective Belocal franchisees to understand this provision, as it highlights the importance of managing legal risks and obligations. Franchisees should consult with legal counsel to understand their rights and responsibilities in the event of a lawsuit or judgment. The ability to file a supersedeas bond offers a degree of protection, but it also involves additional costs and legal complexities that franchisees should be prepared to address.