Are there any exceptions to the terms outlined in the Black Bear Diner Addendum to the Franchise Agreement?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
you sign the Franchise Agreement and expires 10 years from the date you actually open your Franchised Restaurant ("Initial Term"), unless terminated earlier in accordance with its terms.
4.2 Renewal Term
Franchisee shall have the right to acquire a successor franchise at the expiration of the initial term for an additional term of ten (10) years ("Renewal Term"), provided the following conditions must have been fulfilled and remain true as of the last day of the Initial Term of this Agreement:
- (a) Franchisee has, during the entire term of this Agreement, substantially complied with all its provisions and is not in default at time of renewal;
- (b) Franchisee shall have the right to remain in possession of the Approved Location for the duration of the Renewal Term;
- (c) Franchisee shall make capital expenditures necessary to remodel, modernize and redecorate the Franchised Restaurant so that the Franchised Restaurant reflects the then-current physical appearance and image for a new Black Bear Diner restaurant;
- (d) Franchisee has given notice to Franchisor of its intent to renew not less than nine (9) months nor more than twelve (12) months prior to the end of the Initial Term;
- (e) Franchisee shall execute and deliver Franchisor's then-current form of franchise agreement to Franchisor. The new franchise agreement shall supersede this Agreement in all respects, and the terms of which may differ from the terms of this Agreement including, without limitation, a different percentage Royalty Fee and Marketing Fund Contribution; provided, however, Franchisee shall not be required to pay the then-current Franchise Fee;
- (f) Franchisee has complied with Franchisor's then-current training requirements for franchisees and their employees;
- (g) Franchisee pays a renewal fee of $5,000 at time of signing the then-current form of franchise agreement; and
- (g) Franchisee has executed a general release of any and all claims against Franchisor and any affiliate, and their respective officers, directors, agents, and employees, arising out of or related to this Agreement, or any related agreement.
5. SELECTION AND DEVELOPMENT OF APPROVED LOCATION
5.1 Site Selection
If the site for the Approved Location has been located by Franchisee and approved by Franchisor upon execution of this Agreement, then such Approved Location will be identified in Exhibit A to this Agreement. Otherwise, Franchisee agrees to locate a suitable site for the Approved Location within 60 days after execution of this Agreement. In the event a site for the Approved
Location has not been approved by Franchisor before the expiration of the 60 day period, then Franchisor may terminate this Agreement immediately on notice without any need for a cure opportunity. Franchisor shall provide Franchisee with general guidelines and assistance in selecting a site for the Franchised Restaurant. If requested by Franchisee, then a representative of Franchisor will make a visit for the purpose of assisting Franchisee in evaluating a single or alternative prospective site(s). Prior to entering into a commitment to purchase or lease a prospective site, Franchisee shall obtain Franchisor's written approval, which approval shall not be unreasonably withheld.
Franchisor does not represent that it or any of its employees have special expertise in selecting sites or that the Franchised Restaurant will be profitable or successful as a result of Franchisor's approval. Franchisee acknowledges that it is ultimately responsible for finding and selecting a site for the Approved Location.
5.2 Lease of Approved Location
Franchisee agrees it will not enter into any agreement to purchase or lease a site for the Approved Location without first obtaining Franchisor's written approval thereof. Such approval shall not be unreasonably withheld, but Franchisor shall be entitled to be sure that nothing therein contained is contradictory to, or likely to interfere with, Franchisor's rights or Franchisee's duties under this Agreement. If the Franchisee leases the Approved Location, then the Franchisee will use its best efforts to negotiate a lease term that coincides with the Term of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, there are a few specific exceptions and conditions related to the standard franchise agreement terms. One key area is the non-compete clause. While franchisees are generally restricted from engaging in competitive businesses during the term of their agreement and for two years after termination within a 25-mile radius of their Black Bear Diner location or any other Black Bear Diner, these restrictions can be waived with the franchisor's prior written consent. This means a franchisee could potentially be allowed to operate a similar business under certain circumstances if Black Bear Diner approves it.
Another exception relates to the renewal of the franchise agreement. A franchisee has the right to acquire a successor franchise for an additional ten-year term if they meet certain conditions. These include substantial compliance with the existing agreement, the right to remain in possession of the approved location, completing required remodeling, providing timely notice of intent to renew, executing the then-current franchise agreement, meeting training requirements, paying a $5,000 renewal fee, and executing a general release of claims against Black Bear Diner. Notably, the terms of the new franchise agreement can differ from the original, including potential changes to the royalty fee and marketing fund contribution percentages.
Finally, Black Bear Diner retains specific rights regarding the brand and system. While franchisees are granted a protected area, typically a three-mile radius around their location, this is subject to certain reservations. Black Bear Diner can operate or license others to operate restaurants outside this protected area, operate other businesses under different trademarks, and sell products through alternative channels like grocery stores or the internet, even within the franchisee's protected area. This highlights that the franchise is non-exclusive, and Black Bear Diner maintains broad discretion over the brand's development and distribution strategies.