What is the definition of 'Developer' as it relates to the 'THIS GUARANTY AND ASSUMPTION OF OBLIGATIONS' and the Black Bear Diner franchise?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Each present and future: (i) shareholder of a Developer that is a corporation with at least a twenty-five percent (25%) equity interest in Developer; (ii) member of a Developer that is a limited liability company with at least a twenty-five percent (25%) equity interest in Developer; (iii) partner of a Developer that is a partnership with at least a twenty-five percent (25%) equity interest in
Developer; (iv) partner of a Developer that is a limited liability partnership with at least a twentyfive percent (25%) equity interest in Developer; (v) general partner of Developer that is a limited partnership; (vi) or managing member of a Developer that is a limited liability company; shall jointly and severally guarantee Developer's performance of each and every provision of this Agreement by executing the Guarantee in the form attached to this Agreement as Exhibit C.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, the term 'Developer' is specifically defined in relation to the guarantee of performance under the development agreement. The FDD specifies that certain individuals associated with the Developer entity must guarantee the Developer's performance of the agreement. These individuals include shareholders, members, or partners with at least a twenty-five percent equity interest in the Developer, depending on whether the Developer is a corporation, limited liability company, or partnership. Additionally, general partners of limited partnerships and managing members of limited liability companies acting as Developers are also required to provide this guarantee.
This guarantee is formalized through the execution of a 'Guarantee' document, which is included as Exhibit C to the Development Agreement. This requirement ensures that individuals with significant financial stakes or management roles within the Developer entity are personally liable for the Developer's obligations to Black Bear Diner. This provides Black Bear Diner with an added layer of security, as it can pursue these individuals directly if the Developer fails to meet its contractual obligations.
For a prospective Black Bear Diner franchisee considering a development agreement, this means that if their business entity is structured as a corporation, LLC, or partnership, certain owners or managing members with significant equity will be required to personally guarantee the performance of the development agreement. This is a standard practice in franchising, designed to ensure commitment and accountability from the Developer. Franchisees should carefully review Exhibit C and understand the full scope of the obligations they will be personally guaranteeing.