Is prior written consent required from Black Bear Diner for any Transfer of interest?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
7.2 By Developer
- 7.2.1 If Developer is a corporation, limited liability company, partnership, or limited liability partnership, each principal of Developer with at least a ten percent (10%) equity ownership interest in Developer ("Principal"), and the interest of each Principal in Developer, is identified in Exhibit C hereto.
Developer represents and warrants that its owners are as set forth on Exhibit C attached to this Agreement, and covenants that it will not permit the identity of such owners, or their respective interests in Developer, to change without complying with this Agreement.
Franchisor shall have the right to designate any person or entity which owns a direct or indirect interest in Developer as a Principal, and Exhibit C shall be so amended automatically upon notice thereof to Developer.
Throughout the term of this Agreement, Franchisor shall have a continuing right to designate as a Principal any person or entity that owns a direct or indirect interest in Developer.
- 7.2.2 This Agreement has been entered into by Franchisor in reliance upon and in consideration of the individual or collective character, reputation, skill, attitude, business ability, and financial capacity of Developer or, if applicable, its Principals who will actively and substantially participate in the development, ownership and operation of the Black Bear Diner restaurants.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, if the Developer is a corporation, limited liability company, partnership, or limited liability partnership, changes to the identity or interests of Principals (those with at least a 10% equity ownership) require compliance with the agreement. Black Bear Diner retains the right to designate any direct or indirect interest holder in the Developer as a Principal, amending Exhibit C of the agreement upon notice.
The agreement between Black Bear Diner and the Developer is based on the character, reputation, skills, and financial capacity of the Developer and its Principals. This highlights the importance Black Bear Diner places on who is involved in the ownership and operation of the franchise.
This means that as a prospective Black Bear Diner franchisee, if your business structure involves multiple stakeholders with significant equity, any changes to those stakeholders or their ownership percentages will need to be disclosed and managed according to the franchise agreement. This ensures that Black Bear Diner maintains control over who is involved in their franchises and that the new individuals meet their standards.