If consent is required from another contracting party, what must the Black Bear Diner Franchisee do?
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 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, a franchisee must obtain prior written consent from the franchisor to engage in any competitive business during the term of the agreement. This restriction applies to the franchisee, as well as any personal guarantors, and covers a wide range of activities, including owning, operating, or having any interest in a competitive business. This requirement extends to acting as an employee, agent, consultant, affiliate, licensee, partner, officer, director, or shareholder of any entity involved in a competitive business.
After the termination or expiration of the franchise agreement, the franchisee and any personal guarantors are further restricted from engaging in a competitive business for a period of two years. This restriction applies within a 25-mile radius of the approved Black Bear Diner location or any other Black Bear Diner restaurant. The agreement specifies that this geographical and time limitation is deemed reasonable and necessary to protect Black Bear Diner and its franchisees, allowing Black Bear Diner the opportunity to resell or develop a new restaurant in the area.
These covenants not to compete are designed to protect Black Bear Diner's confidential information, training, and market presence. The franchisee acknowledges that receiving valuable training and confidential information necessitates these restrictions. The agreement also allows for modification of these covenants, suggesting that specific circumstances might warrant adjustments to the non-compete terms. Overall, these provisions highlight the importance of securing the franchisor's consent before engaging in any business activities that could be seen as competitive, both during and for a period after the franchise agreement.