Under what circumstances is a waiver by Black Bear Diner of a Developer's default considered binding?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Except as otherwise provided in Section 8.1, if Developer fails to comply with any material term and condition of this Agreement, or fails to comply with the terms and conditions of any Franchise Agreement or other development agreement between the Developer (or a person or entity affiliated with or controlled by the Developer) and Franchisor, such action shall constitute a default under this Agreement. Upon the occurrence of any such default, Franchisor may terminate this Agreement by giving written notice of termination stating the nature of such default to Developer at least thirty (30) days prior to the effective date of termination; provided, however, that Developer may avoid termination by immediately initiating a remedy to cure such default, curing it to Franchisor's satisfaction, and by promptly providing proof thereof to Franchisor within the thirty (30) day period (or such longer period as applicable law may require). If any such default is not cured within the specified time (or such longer period as applicable law may require), this Agreement and all rights granted hereunder (including but not limited to, the right to develop any new Black Bear Diner restaurants) will terminate without further notice to Developer, effective immediately upon the expiration of the thirty (30) day period (or such longer period as applicable law may require).
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the circumstances under which a waiver by Black Bear Diner of a Developer's default is considered binding are not explicitly detailed. The document does not provide specific information on what constitutes a binding waiver or the conditions that must be met for such a waiver to be effective. Instead, the FDD outlines the conditions under which a developer may default and the process for termination of the agreement.
Item 8.2 discusses termination with the opportunity to cure, stating that failure to comply with any material term or condition of the Development Agreement constitutes a default. Black Bear Diner may terminate the agreement with written notice, allowing the developer a period (typically 30 days) to cure the default. If the default is cured to Black Bear Diner's satisfaction within the given timeframe, termination can be avoided. However, this section focuses on the process of addressing defaults rather than the conditions for waiving them.
Since the FDD does not specify the conditions under which a waiver of default would be considered binding, it is important for a prospective franchisee to seek clarification from Black Bear Diner regarding their policies and practices on waivers. Understanding the specific circumstances, requirements, and documentation necessary for a waiver to be binding is crucial for protecting the franchisee's investment and development rights.