Where can I find the definition of 'cause' for termination of the Black Bear Diner Area Development Agreement?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
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AREA DEVELOPMENT AGREEMENT
| Provision | Section in the Area Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the term of the Area Development Agreement | Section 5 | The rights granted under the Area Development Agreement expire on the earlier to occur of the actual opening date of the last of the Black Bear Diner restaurants required to be developed pursuant to the Development Schedule or the last day of the last Development Period under the Development Schedule. |
| b. | Renewal or extension of term | Not Applicable | |
| c. | Requirements for you to renew or extend | Not Applicable | |
| d. | Termination by you | You may terminate under any grounds permitted by law. | |
| e. | Termination by us without cause | Not Applicable | |
| f. | Termination by us with cause | Section 8 | If you breach the Area Development Agreement, we will have cause to terminate. |
| g. | "Cause" defined (defaults which can be cured) | Section 8 | Except for defaults in (h) below, you generally have 30 days to cure any defaults contained in the Area Development Agreement. |
| 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; |
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, the definition of 'cause' for termination of the Area Development Agreement can be found in Section 8 of the agreement. Generally, if a developer breaches the Area Development Agreement, Black Bear Diner has cause to terminate the agreement.
Specifically, Section 8 outlines that, with the exception of certain defaults, a developer typically has 30 days to correct any defaults outlined in the Area Development Agreement. However, Section 8.1 and 9.1 define defaults that cannot be cured, which include bankruptcy-related events, unapproved transfers, 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 Black Bear Diner for cause or by the developer without cause, and failure to meet the development obligations. Black Bear Diner can terminate the Development Agreement if they have delivered a notice of termination of a Franchise Agreement according to its terms, or if the developer has terminated a Franchise Agreement without cause.
Prospective Black Bear Diner area developers should carefully review Sections 8, 8.1, and 9.1 of the Area Development Agreement to fully understand what constitutes cause for termination, the implications of such termination, and their rights and obligations in such a scenario. Understanding these provisions is crucial for managing the relationship with Black Bear Diner and mitigating potential risks associated with the development agreement.