Under the Belocal Franchise Agreement, are franchisees prohibited from assigning any claims released under Section 1 of the agreement?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- No Assignment of Claims. Franchisee represents and warrants for itself and the Franchisee Related Parties that it has not assigned or transferred, or purported to assign or transfer, to any person or entity, any Claims released under Section 1 of this Agreement, and agrees to indemnify, defend and hold the Releasees harmless from and against any and all Claims based on or arising out of any such assignment or transfer, or purported assignment or transfer, of any Claims, or any portion thereof or interest therein. Franchisee represents and warrants that, since the date of the Franchise Agreement, there has been no assignment or transfer, and no purported assignment or transfer, to any person or entity of the Franchise, the Franchise Agreement, or any rights or interests therein or in the Franchisee.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees are prohibited from assigning any claims released under Section 1 of the Franchise Agreement. The agreement states that the franchisee warrants that they have not assigned or transferred any claims released under Section 1 to any person or entity.
Furthermore, the franchisee agrees to indemnify, defend, and hold harmless the Releasees (which include Belocal and its affiliates) from any claims based on or arising out of any such assignment or transfer, or purported assignment or transfer, of any claims, or any portion thereof or interest therein. This means that if a franchisee attempts to assign a claim that was released under Section 1, they will be responsible for covering any costs or damages incurred by Belocal or related parties as a result of that assignment.
This provision protects Belocal from dealing with third parties who might attempt to assert claims that the franchisee has already released. It also ensures that Belocal only has to deal directly with its franchisees regarding any potential claims. Franchisees should be aware of this restriction and understand that they cannot transfer or assign any claims they have released under the agreement.