Does the Ohio Addendum to the Black Bear Diner Franchise Agreement depend on any other agreements or conditions?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor shall execute the Franchise Agreement for each Black Bear Diner restaurant to be developed under this Agreement only if: (i) Developer is in compliance with and is not in default of any requirements and obligations of this Development Agreement or any other agreements between Franchisor and Developer; and (ii) in the case of each then existing Franchise Agreement, Developer, as Franchisee, is in compliance with all and is not in default of any of its obligations under the Franchise Agreement. In order to meet the Development Schedule, the Franchise Agreement must be executed by Developer and Franchisor in accordance with the Development Schedule.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the Black Bear Diner franchise agreement is contingent upon certain conditions, particularly if the franchisee is a developer. Specifically, the franchisor will only execute the Franchise Agreement if the developer is compliant with all requirements and not in default of the Development Agreement or any other agreements between the franchisor and the developer.
This condition precedent ensures that developers, who may be planning multiple Black Bear Diner locations, are in good standing with the franchisor before any new franchise agreements are finalized. This protects the Black Bear Diner brand by ensuring that multi-unit operators meet their existing obligations.
Furthermore, the Development Agreement outlines that termination of the agreement can occur if the developer fails to comply with any material term or condition of the Development Agreement, or any Franchise Agreement or other development agreement between the developer and franchisor. This clause underscores the interconnectedness of these agreements, meaning a default in one agreement can trigger consequences in others. The franchisee must comply with all applicable provisions of the Franchise Agreement, including non-compete clauses.
For a prospective Black Bear Diner franchisee, especially one considering a multi-unit development, it is crucial to understand the terms of both the Franchise Agreement and the Development Agreement. Compliance with all agreements is essential to maintain good standing and avoid potential termination, which could impact the ability to develop and operate multiple Black Bear Diner restaurants.