Are Black Bear Diner franchisee shareholders required to sign nondisclosure agreements?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
edged to be Franchisor's property);
- (h) assign to Franchisor, at Franchisor's option, all telephone numbers (and associated listings) for the Franchised Restaurant; and
(i) comply with all other applicable provisions of this Agreement including the noncompete provisions.
17. FRANCHISEE'S COVENANTS NOT TO COMPETE
17.1 During Term
Franchisee specifically acknowledges that pursuant to this Agreement, Franchisee will receive valuable training and Confidential Information of Franchisor and the System. Accordingly, Franchisee and the Personal Guarantors will not, during the term of this Agreement, on their own account or as an employee, agent, consultant, affiliate, licensee, partner, officer, director, or shareholder of any other person, firm, entity, partnership or corporation, own, operate, lease, franchise, conduct, engage in, be connected with, have any interest in, or assist any person or entity engaged in any Competitive Business, except with the prior written consent of the Franchisor.
17.2 After Termination
Franchisee and the Personal Guarantors covenant that, except as otherwise approved in writing by Franchisor, neither Franchisee nor the Personal Guarantors will not, for a period of two (2) years after the expiration or termination of this Agreement, regardless of the cause of for termination, either directly or indirectly, for themselves or through, on behalf of or in conjunction with, any person, persons, partnership, corporation, limited liability company or other business entity own an interest in, manage, operate, act as a consultant with respect to the management or operation of any Competitive Business within a radius of twenty-five (25) miles of the Approved Location or within twenty-five (25) miles of any other Black Bear Diner restaurant.
Source: Item 14 — PATENTS, COPYRIGHTS, AND PROPRIETARY INFORMATION (FDD page 39)
What This Means (2025 FDD)
Based on the 2025 Black Bear Diner Franchise Disclosure Document, while there isn't a specific requirement for all shareholders to sign a nondisclosure agreement, the franchisee and personal guarantors are subject to certain covenants, including non-compete provisions and the protection of confidential information. During the term of the agreement, the franchisee and personal guarantors are prohibited from engaging in any competitive business. This restriction applies to them directly or indirectly, whether as an employee, agent, consultant, affiliate, licensee, partner, officer, director, or shareholder of another entity, without prior written consent from Black Bear Diner.
Following the termination or expiration of the Franchise Agreement, the franchisee and personal guarantors are further restricted from involvement in any competitive business within a 25-mile radius of the Black Bear Diner location for a period of two years. This post-termination covenant is in place regardless of the reason for termination and is designed to protect Black Bear Diner's interests and its franchisees by preventing unfair competition using the franchisor's confidential information and system.
Additionally, upon termination or expiration of the agreement, the franchisee must cease using Black Bear Diner's confidential information, the System, and the Marks. They must also return the operations manual and all other materials related to the operation of the franchised restaurant to Black Bear Diner. These measures collectively ensure the protection of Black Bear Diner's proprietary information and prevent its misuse by former franchisees or related parties.