factual

Under the Belocal franchise agreement, what constitutes an 'indictable offense' that can lead to termination?

Q: Under the Belocal franchise agreement, what constitutes an 'indictable offense' that can lead to termination?

- (7) Whether before or after the Effective Date, Franchisee or any Principal has been or is charged with, convicted of, or pleads nolo contendere to, a felony or indictable offense in any court, is subject to a judgment, default, lien, bankruptcy, or similar occurrence, becomes known to Communities, Industry Groups, or advertisers as being of bad moral character, disparages, embarrasses, or tarnishes Franchisor's reputation, or fails to comport itself at all times in accordance with the highest standards of conduct and behavior, consistent with its responsibilities as a franchisee; Source: Item 22 — CONTRACTS (FDD page 71)

Belocal Franchise · 2025 FDD

Answer from 2025 FDD Document

(7) Whether before or after the Effective Date, Franchisee or any Principal has been or is charged with, convicted of, or pleads nolo contendere to, a felony or indictable offense in any court, is subject to a judgment, default, lien, bankruptcy, or similar occurrence, becomes known to Communities, Industry Groups, or advertisers as being of bad moral character, disparages, embarrasses, or tarnishes Franchisor's reputation, or fails to comport itself at all times in accordance with the highest standards of conduct and behavior, consistent with its responsibilities as a franchisee;

Source: Item 22 — CONTRACTS (FDD page 71)

What This Means (2025 FDD)

According to Belocal's 2025 Franchise Disclosure Document, the franchise agreement can be terminated if a franchisee or any principal has been charged with, convicted of, or pleads nolo contendere to a felony or indictable offense in any court. This clause allows Belocal to terminate the agreement without providing an opportunity to cure the issue.

This provision is fairly standard in franchise agreements, as franchisors typically want to protect their brand's reputation and avoid association with individuals involved in serious legal issues. The inclusion of being "charged with" an offense, in addition to conviction, gives Belocal broad discretion to terminate the agreement even before a final verdict.

For a prospective Belocal franchisee, this means that any past or present legal issues involving felonies or indictable offenses could impact their ability to obtain or maintain a franchise. It also means that any future charges or convictions could lead to immediate termination of the agreement, regardless of whether the offense is directly related to the operation of the Belocal franchise. Franchisees should be aware of this clause and ensure they and their principals maintain a clean legal record to avoid potential termination.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.

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