Under what circumstances is a waiver by Black Bear Diner of a franchisee default considered binding?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
8.2 Termination With Opportunity to Cure
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 Black Bear Diner Franchise Disclosure Document, the document does not specify the circumstances under which a waiver of franchisee default is considered binding. The FDD does outline conditions under which the franchisor may terminate the agreement if the franchisee fails to comply with the terms and conditions, and the process for curing such defaults. However, it does not detail the specifics of waiver conditions.
Item 8.2 discusses termination with the opportunity to cure, stating that failure to comply with any material term constitutes a default, potentially leading to termination after a 30-day notice period. The franchisee can avoid termination by initiating and curing the default to the franchisor's satisfaction within this period. However, this section focuses on the process of addressing defaults rather than the conditions under which Black Bear Diner might waive a default.
Prospective Black Bear Diner franchisees should seek clarification from the franchisor regarding the conditions under which a waiver of default would be granted and considered binding. Understanding these conditions is crucial for managing risk and maintaining a clear understanding of the franchisor's expectations and flexibility in cases of non-compliance.