Can Belocal waive the Wind-Down Damages fee under certain circumstances?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee(1) | Amount | Due Date | Remarks |
|---|---|---|---|
| Management Fee | 45% of monthly Cash Received, plus any expenses we incur in managing the Franchised Business | Monthly | Only payable in the event we must operate your franchise due to death, disability, defaults etc. The Management Fee is in addition to other fees due to us. |
| Customer Complaint Fee | Our costs and expenses associated with our response to and any resolution of a complaint | On demand | If an advertiser, client, or third party complains to us and you fail to satisfactorily remedy the complaint, you will pay us our costs and expenses associated with our response to and any resolution of the complaint. |
| Wind-Down Damages | An amount equal to the greater of (a) 6 months' worth of the average Royalty you paid for the 12 months prior to the default or (b) $2,500 | On demand | Only payable if you fail to comply with the wind-down procedures or abandon the Franchised Business. |
| Transfer Damages | Greater of 15% of transfer price or $25,000 | Within 15 days of our demand | You will pay these transfer damages if you do not comply with the transfer terms under the Franchise Agreement. |
Source: Item 6 — OTHER FEES (FDD pages 14–31)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, the Wind-Down Damages fee is only payable if a franchisee fails to comply with the wind-down procedures or abandons the franchised business. The fee is an amount equal to the greater of (a) 6 months’ worth of the average Royalty the franchisee paid for the 12 months prior to the default or (b) $2,500.
This means that Belocal will only charge this fee if the franchisee does not follow the proper steps when closing their business or if they simply abandon the business. If the franchisee complies with the wind-down procedures, they will not have to pay this fee.
It is important for a prospective Belocal franchisee to understand the wind-down procedures outlined in the Franchise Agreement to avoid incurring this fee. Franchisees should carefully review these procedures and ensure they can comply with them if they ever decide to close their Belocal business.