Is bankruptcy a non-curable default under the Black Bear Diner Area Development Agreement?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the Area Development Agreement | Summary | |
|---|---|---|---|
| h. | "Cause" defined (defaults which cannot be cured) | Section 8.1 and 9.1 | Non-curable defaults include: bankruptcy related events, any unapproved transfers, any material misrepresentations in the application for the Development Agreement; conviction of a felony; any unauthorized use of our Marks or Confidential Information; termination of a Franchise Agreement by us for cause or by you without cause; your failure to meet the development obligations. We can terminate the Development Agreement if we have delivered a notice of termination of a Franchise Agreement in accordance with its terms and conditions or you have terminated a Franchise Agreement without cause. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 41–46)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, certain defaults under the Area Development Agreement cannot be cured, meaning the franchisee does not have an opportunity to correct the issue before termination. Specifically, bankruptcy-related events are listed as non-curable defaults. This means that if a Black Bear Diner area developer experiences bankruptcy, the franchisor, Black Bear Diner, has grounds to terminate the Area Development Agreement immediately.
Other non-curable defaults include unapproved transfers of the agreement, material misrepresentations in the application for the Development Agreement, conviction of a felony, unauthorized use of Black Bear Diner's Marks or Confidential Information, termination of a Franchise Agreement by the franchisor for cause or by the franchisee without cause, and failure to meet the development obligations.
This is a significant risk for prospective area developers, as bankruptcy or any of the other listed events could lead to the immediate termination of their development rights. Franchisees should carefully consider their financial stability and ability to meet development obligations before entering into an Area Development Agreement with Black Bear Diner.