When is the Belocal Wind-Down Damages fee due?
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 due 'on demand.' This means that Belocal can request immediate payment of this fee if a franchisee fails to comply with the wind-down procedures or abandons the franchised business.
The Wind-Down Damages fee is calculated as the greater of two amounts: either six months' worth of the average royalty paid by the franchisee over the 12 months prior to the default, or a flat fee of $2,500. This fee is only payable if the franchisee fails to follow the proper wind-down procedures or abandons the Belocal franchise.
For a prospective Belocal franchisee, this highlights the importance of adhering to the franchise agreement's wind-down procedures. Failure to do so can result in a significant financial penalty, potentially reaching several thousands of dollars depending on the royalty payments made prior to the default. Franchisees should carefully review the wind-down procedures outlined in the franchise agreement to avoid incurring this fee.