Can Black Bear Diner terminate the Area Development Agreement without cause?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in the Area Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the term of the Area Development Agreement | Section 5 | The rights granted under the Area Development Agreement expire on the earlier to occur of the actual opening date of the last of the Black Bear Diner restaurants required to be developed pursuant to the Development Schedule or the last day of the last Development Period under the Development Schedule. |
| b. | Renewal or extension of term | Not Applicable | |
| c. | Requirements for you to renew or extend | Not Applicable | |
| d. | Termination by you | You may terminate under any grounds permitted by law. | |
| e. | Termination by us without cause | Not Applicable | |
| f. | Termination by us with cause | Section 8 | If you breach the Area Development Agreement, we will have cause to terminate. |
| g. | "Cause" defined (defaults which can be cured) | Section 8 | Except for defaults in (h) below, you generally have 30 days to cure any defaults contained in the Area Development Agreement. |
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, Black Bear Diner cannot terminate the Area Development Agreement without cause. The table outlining termination terms specifies that termination by Black Bear Diner without cause is "Not Applicable."
Black Bear Diner can only terminate the Area Development Agreement with cause if the franchisee breaches the agreement. Generally, the franchisee has 30 days to cure any defaults, with some exceptions. Non-curable defaults include events like bankruptcy, unapproved transfers, material misrepresentations in the application, a felony conviction, unauthorized use of trademarks or confidential information, or failure to meet development obligations.
It is important for a prospective Black Bear Diner area developer to understand what constitutes a breach of the Area Development Agreement and what steps can be taken to remedy a breach. Understanding the circumstances under which the agreement can be terminated is crucial for protecting their investment and development rights.