What rights does Black Bear Diner reserve outside of the Protected Area?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the company retains several rights outside a franchisee's protected area. Black Bear Diner can establish and operate its own restaurants or license others to do so at any location outside of the protected area. This means a franchisee could potentially face competition from other Black Bear Diner locations owned by the company or other franchisees in nearby areas.
Black Bear Diner also reserves the right to establish and operate other businesses, including similar restaurant concepts, under different trademarks, both within and outside the protected area. This clause is significant because it allows Black Bear Diner to diversify its business without being restricted by the franchisee's protected area. A franchisee might find themselves competing with a similar restaurant concept owned or licensed by Black Bear Diner itself.
Furthermore, Black Bear Diner can sell and distribute products authorized for use and resale at the franchised restaurant, including gift shop products, through various channels such as grocery stores, convenience stores, mail order, and internet sales, regardless of customer location, even within a franchisee's protected area. This reservation of rights means that a franchisee's ability to sell these products is not exclusive, and customers within their protected area could purchase the same products from other sources. Black Bear Diner can also engage in any other activities not expressly forbidden by the Franchise Agreement, providing them with broad latitude in their business operations.
Because of these reserved rights, the FDD explicitly states that franchisees will not receive an exclusive territory and may face competition from various sources, including other franchisees, company-owned outlets, alternative distribution channels, and competitive brands controlled by Black Bear Diner. This lack of exclusivity is a common practice in franchising, but it's crucial for prospective franchisees to understand the potential for competition and its impact on their business.