Under the Belocal franchise agreement, what is the franchisee's responsibility regarding the franchisor's attorney's fees in case of default?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Franchisee shall pay all costs, expenses and attorneys' fees incurred by Franchisor in enforcing the terms and conditions of this provision.
Nothing contained herein shall be construed as prohibiting Franchisor from additionally pursuing any other remedies which may be available to Franchisor for a breach.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees are responsible for covering Belocal's legal costs if they default on the franchise agreement. Specifically, if a Belocal franchisee abandons the franchised business before the termination date or fails to follow the wind-down procedures outlined in the Franchise Brand Standards Manual, they will be in default and must pay all costs, expenses, and attorneys' fees incurred by Belocal to enforce the agreement. This obligation is in addition to any other remedies Belocal might pursue for the breach.
Furthermore, upon the expiration or termination of the Belocal franchise agreement due to a franchisee's default, the franchisee is obligated to pay all damages, costs, and expenses, including reasonable attorney's fees and enforcement costs, incurred by Belocal in connection with any of the franchisee's defaults under the agreement. This includes costs and expenses related to obtaining injunctive or other relief for the enforcement of any provisions within Section 11 of the agreement.
This means that a Belocal franchisee could face significant financial burdens beyond the initial franchise fees and ongoing royalties if they fail to meet the contractual obligations. The franchisee's responsibility extends to covering Belocal's legal expenses, which can quickly escalate depending on the complexity and duration of any legal proceedings. Prospective franchisees should carefully review the default and termination clauses in the franchise agreement and fully understand their obligations to avoid potential legal and financial repercussions.