Under the Belocal franchise agreement, does the franchisor have discretion to grant extensions for transferring the Belocal franchise after death or disability?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
- (1) Upon the death or disability of Franchisee or a Principal, the executor, administrator, conservator or other personal representative of such person shall transfer such Franchisee's or Principal's interest to a party approved by Franchisor within six months thereof. The transfer must be completed within six months of the death or disability or this Agreement shall automatically terminate, unless Franchisor grants an extension in writing. Such transfers, including, without limitation, transfers by devise or inheritance, shall be subject to all conditions set forth in this Article 9, including Franchisor's right of first offer and right of first refusal, provided that if the transfer is by devise or inheritance, the transferor shall not be obligated to pay a transfer fee. Franchisor's consent to a transfer of any interest, subject to the restrictions of this Article 9 of this Agreement, shall not constitute a waiver of any claims it may have against the assignor, nor shall it be deemed a waiver of Franchisor's right to demand exact compliance with any of the terms or conditions of this Agreement by the transferee. The term "disability" means a mental or physical disability, impairment, or condition that is reasonably expected to prevent or actually does prevent Franchisee or a Principal from operating the Franchised Business in the manner required by this Agreement and the Franchise Brand Standards Manual or from performing its, his, or her obligations under this Agreement and the Franchise Brand Standards Manual.
- (2) During the period between death or disability of Franchisee or a Principal and the completion of the transfer described in Section 9.E(1), the Franchised Business still must be operated in accordance with the terms and conditions of this Agreement. Upon the death or disability of Franchisee or a Principal, the Franchisee's or the Principal's executor, administrator, conservator, guardian, or other personal representative must within a reasonable time, not to exceed 30 days from the date of death or disability, appoint a manager for the Franchised Business (unless Franchisee or the Principal had previously appointed a manager who remains responsible for the day-to-day operation of the Franchised Business). Any new manager must complete Franchisor's standard training program at Franchisee's expense, sign
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, in the event of the death or disability of a franchisee or a principal, the executor, administrator, conservator, or other personal representative is required to transfer the interest to a Belocal-approved party within six months. However, Belocal retains the discretion to grant a written extension to this six-month period. If the transfer is not completed within the initial six-month timeframe or any granted extension, the franchise agreement will automatically terminate.
This provision is important for prospective Belocal franchisees as it outlines the procedure to be followed in the unfortunate event of death or disability. The franchisee's estate or representative must act swiftly to transfer the franchise to an approved party to avoid automatic termination of the agreement. The fact that Belocal can grant extensions provides some flexibility, but it is not guaranteed.
It is also important to note that any transfer, including those by devise or inheritance, are subject to all the conditions outlined in Article 9 of the franchise agreement, including Belocal's right of first offer and right of first refusal. However, transfers by devise or inheritance are exempt from the transfer fee. The appointed manager must also complete Belocal's standard training program at the franchisee's expense and adhere to Belocal's requirements for manager acceptance.
Belocal also has the option, but not the obligation, to assume management of the franchised business (or appoint a party to do so) until the transfer is completed, according to Section 9.E(1). The terms and conditions for this step-in right are detailed in Section 12.E of the franchise agreement. This ensures that the business continues to operate according to the franchise agreement during the transfer process.