Is making material misrepresentations in the application for the Development Agreement a non-curable default for Black Bear Diner?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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; any unauthorized use of our Marks or Confidential Information; termination of a Franchise Agreement by us for cause or by you without cause; your failure to meet the development obligations. We can terminate the Development Agreement if we have delivered a notice of termination of a Franchise Agreement in accordance with its terms and conditions or you have terminated a Franchise Agreement without cause. |
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, making material misrepresentations in the application for the Development Agreement is indeed a non-curable default. This means that if a prospective franchisee provides false or misleading information during the application process for a Development Agreement, Black Bear Diner has grounds to terminate the agreement immediately without providing an opportunity to correct the misrepresentation.
This provision is significant because it places a high degree of responsibility on the applicant to ensure the accuracy and completeness of all information provided to Black Bear Diner. Any inaccuracies, whether intentional or unintentional, could lead to the termination of the Development Agreement. This could result in the loss of any investments made in anticipation of developing Black Bear Diner restaurants.
Non-curable defaults are more serious than curable defaults, where the franchisee is given a period (typically 30 days) to rectify the issue. The FDD specifies that non-curable defaults also include events like bankruptcy, unauthorized transfers, felony convictions, unauthorized use of trademarks or confidential information, termination of a Franchise Agreement for cause by Black Bear Diner, or termination by the franchisee without cause, and failure to meet development obligations.
Prospective franchisees should exercise extreme caution and diligence when completing the application for a Development Agreement with Black Bear Diner. It is advisable to seek legal counsel to review the application and ensure that all information is accurate and transparent to avoid potential termination of the agreement.