Under the Belocal franchise agreement, what section governs the transfer of the Belocal Franchised Business after death or disability?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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E. Transfer Upon Death or Disability
- (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
Franchisor's then-current form of confidentiality and non-solicit agreement, and comply with any of Franchisor's then-current requirements for acceptance of a manager.
- (3) Not in lieu of any additional rights Franchisor may have, upon death or disability of Franchisee or a Principal, Franchisor may, but shall not be obligated to, assume the management of the Franchised Business (or appoint a party to assume its management) until the transfer pursuant to Section 9.E(1) is completed. The terms and conditions for the exercise of Franchisor's step-in right are set forth in Section 12.E.
- F. Transfer Damages.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Section 9.E of the franchise agreement governs the transfer of the Belocal Franchised Business upon the death or disability of the franchisee or a principal. This section stipulates that the executor, administrator, conservator, or other personal representative must transfer the interest to a party approved by Belocal within six months of the death or disability, unless Belocal grants a written extension.
The transfer is subject to all conditions outlined in Article 9, including Belocal's right of first offer and right of first refusal. However, if the transfer occurs through devise or inheritance, the transferor is not required to pay a transfer fee. Belocal's consent to any transfer does not waive any claims it may have against the assignor, nor does it waive Belocal's right to demand compliance with the agreement's terms by the transferee. The agreement defines "disability" as a mental or physical condition that prevents the franchisee or a principal from operating the franchised business as required by the agreement and the Franchise Brand Standards Manual.
During the period between the death or disability and the completion of the transfer, the franchised business must continue to operate according to the agreement's terms. The personal representative must appoint a manager within 30 days of the death or disability, unless a manager was previously appointed and remains responsible. Any new manager must complete Belocal's standard training program at the franchisee's expense, sign Belocal's confidentiality and non-solicit agreement, and comply with 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 Belocal's step-in right are detailed in Section 12.E. Failure to transfer the Agreement and the Franchised Business within six months of death or disability, unless an extension is granted in writing by Belocal, can result in termination of the agreement.