If I breach the Area Development Agreement, will Black Bear Diner have cause to terminate?

According to Black Bear Diner's 2025 Franchise Disclosure Document, Black Bear Diner has grounds to terminate the Area Development Agreement if the franchisee breaches it. However, the franchisee generally has 30 days to cure any defaults, except for certain non-curable defaults. These non-curable defaults 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 franchisee without cause, or failure to meet the development obligations.

If a franchisee commits a breach that can be cured, they will typically have 30 days to resolve the issue. If the breach falls under the non-curable defaults, Black Bear Diner can proceed with termination without offering an opportunity to cure the default. This distinction is important for prospective franchisees to understand, as it outlines the types of actions that could lead to immediate termination of the Area Development Agreement.

Upon termination of the Area Development Agreement, the franchisee loses the right to develop or operate additional franchised restaurants, but they can continue to own and operate restaurants under existing Franchise Agreements, provided all amounts owed to Black Bear Diner are paid. This means that while the development rights are revoked, existing operational franchises can continue under their original terms. Franchisees should carefully review Section 8, 8.1, and 9.1 of the Area Development Agreement to fully understand the implications of both curable and non-curable defaults and their obligations upon termination.