Are there any exceptions to the definition of 'Competitive Business' for a Black Bear Diner franchisee?

According to the 2025 Black Bear Diner Franchise Disclosure Document, a 'Competitive Business' is defined as any restaurant that offers similar food products to Black Bear Diner or uses a similar method of operation or trade dress. However, there are two specific exceptions to this definition.

First, any business operated by the franchisee under a Franchise Agreement with Black Bear Diner is not considered a 'Competitive Business'. This means a franchisee can own and operate multiple Black Bear Diner locations without violating the non-compete agreement. Second, the ownership of less than five percent (5%) of the stock of any publicly-traded corporation is also excluded from the definition of 'Competitive Business'. This allows franchisees to invest in publicly-traded restaurant companies, provided their ownership stake remains below this threshold.

These exceptions provide some flexibility for Black Bear Diner franchisees. They can expand their involvement with the brand through additional franchises and make minor investments in other restaurant businesses without being considered in violation of the non-compete clause. This is a fairly standard practice in franchising, allowing franchisees some level of diversification and growth opportunities.