Under the Belocal Principal's Undertaking, are the obligations of the Principal and Franchisee dependent on each other?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The obligations of Principal are independent of the obligations of Franchisee, and a separate action or actions may be brought and prosecuted against Principal, whether or not actions are brought against Franchisee or whether or not Franchisee is joined in any such action.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the obligations of the Principal under the Principal's Undertaking are independent of the Franchisee's obligations. This means Belocal can pursue action against the Principal separately, regardless of whether they take action against the Franchisee.
Specifically, Belocal can bring a separate action or actions against the Principal, irrespective of whether actions are initiated against the Franchisee or whether the Franchisee is involved in any such action. This underscores the direct and immediate nature of the Principal's liability as a guarantor.
This independence is further reinforced by the Principal's agreement that their liability will not be contingent upon Belocal pursuing remedies against the Franchisee or any other person. Additionally, the Principal's liability remains unaffected by the Franchisee's insolvency, bankruptcy, or the invalidity of the Franchise Agreement. This ensures that Belocal has recourse to the Principal's guarantee even if the Franchisee faces financial or legal difficulties.
For a prospective Belocal franchisee, this arrangement means that the Principal's Undertaking provides Belocal with a strong and independent guarantee, enhancing the security of the franchise agreement. The Principal cannot claim that their obligations are diminished or relieved due to any actions or inactions related to the Franchisee.