What is a 'Protected Area' under the Black Bear Diner Franchise Agreement?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the terms of the Franchise Agreement, we will grant you a geographic area known as a "Protected Area". If you comply with the Franchise Agreement, we will not operate or license others to operate a Black Bear Diner restaurant from a location within the Protected Territory during the term of the Franchise Agreement. A description of the Protected Territory is included as an exhibit to the Franchise Agreement. The perimeter of the Protected Territory may be described by street boundaries, county lines, state lines, municipal boundaries or other similar boundary descriptions. For the typical Franchised Restaurant, the Protected Territory will encompass an approximate 3-mile radius around the Franchised Restaurant.
As part of the rights reserved by us in the Franchise Agreement, we may (1) establish and operate, and license others to establish and operate, Black Bear Diner restaurants at any location outside of the Protected Area; (2) establish and operate, and license others to establish and operate, other businesses including similar restaurant concepts, using other trademarks, service marks and commercial symbols at any location either within and outside of the Protected Area; (3) sell and distribute products authorized for use and resale at the Franchised Restaurant, including the Gift Shop Products, at wholesale and at retail through alternative channels of distribution including, but not limited to, grocery stores, convenience stores, mail order and Internet sales to customers wherever located, including customers that may be located within the Protected Area; and (4) engage in any other activities not expressly forbidden by the Franchise Agreement. Because of the rights we reserve, you will not receive an exclusive territory. You may face competition from other franchisees, from outlets we own, or from other channels of distribution or competitive brands we control.
Except as described above, we have no contractual right to modify any territorial right that we grant. As indicated above, we are not restricted from soliciting or accepting orders, from, or selling products or services using any trademarks to, consumers located within your Protected Area, including orders, products or services offered from other distribution channels, such as the Internet, catalogues, or other direct marketing sales. If we do so, we will not pay any compensation to you.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, a "Protected Area" is a geographic area granted to the franchisee under the terms of the Franchise Agreement. If the franchisee complies with the Franchise Agreement, Black Bear Diner will not operate or license others to operate a Black Bear Diner restaurant within that Protected Area during the term of the Franchise Agreement. The specific description of the Protected Area is included as an exhibit to the Franchise Agreement and may be defined by street boundaries, county lines, state lines, municipal boundaries, or other similar boundary descriptions. For a typical Black Bear Diner restaurant, the Protected Territory will encompass an approximate 3-mile radius around the Franchised Restaurant.
However, it's important to note that Black Bear Diner reserves certain rights, even within the Protected Area. They can sell and distribute products authorized for use and resale at the Franchised Restaurant, including Gift Shop Products, at wholesale and retail through alternative channels of distribution such as grocery stores, convenience stores, mail order, and Internet sales, even to customers located within the Protected Area. Black Bear Diner also retains the right to establish and operate other businesses, including similar restaurant concepts, using other trademarks, service marks, and commercial symbols at any location either within and outside of the Protected Area.
Because of these reserved rights, the FDD states that franchisees will not receive an exclusive territory and may face competition from other franchisees, from outlets Black Bear Diner owns, or from other channels of distribution or competitive brands they control. Black Bear Diner is also not restricted from soliciting or accepting orders from, or selling products or services using any trademarks to, consumers located within the franchisee's Protected Area, including orders, products, or services offered from other distribution channels, such as the Internet, catalogues, or other direct marketing sales, without providing any compensation to the franchisee.
Prospective franchisees should carefully review the exhibit to the Franchise Agreement that describes the Protected Area to fully understand its boundaries and the extent of the protection offered. They should also consider the potential for competition from other channels and brands controlled by Black Bear Diner when evaluating the potential profitability of a franchise location.