Under what condition will each provision of the Black Bear Diner addendum be effective?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor shall execute the Franchise Agreement for each Black Bear Diner restaurant to be developed under this Agreement only if: (i) Developer is in compliance with and is not in default of any requirements and obligations of this Development Agreement or any other agreements between Franchisor and Developer; and (ii) in the case of each then existing Franchise Agreement, Developer, as Franchisee, is in compliance with all and is not in default of any of its obligations under the Franchise Agreement. In order to meet the Development Schedule, the Franchise Agreement must be executed by Developer and Franchisor in accordance with the Development Schedule.
Once Franchisor has approved the site for the Franchised Restaurant, Franchisee has 365 days to actually open and begin operating the Franchised Restaurant. If Franchisee fails to open and begin operating the Franchised Restaurant within 365 days after Franchisor has approved the site for the Franchised Restaurant, Franchisor has the right to terminate the Franchise Agreement immediately on notice without any need for a cure opportunity.
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).
For each Black Bear Diner restaurant to be developed hereunder, Developer shall submit to Franchisor, in a form specified by Franchisor, a completed site approval package which shall include a site approval form prescribed by Franchisor, an option contract, letter of intent, term sheet, or other evidence satisfactory to Franchisor which describes Developer's favorable prospects for obtaining such site, and such other information or materials as Franchisor may reasonably require.
No site shall be deemed approved unless it has been expressly approved in writing by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the effectiveness of the provisions within the Black Bear Diner addendum are contingent upon several factors, primarily focusing on compliance, adherence to agreements, and specific time-sensitive actions.
For instance, Black Bear Diner will only execute a Franchise Agreement if the developer is in full compliance with all requirements and obligations of the Development Agreement and any other existing agreements between the parties. Similarly, if the developer has existing Franchise Agreements, they must also be in compliance with all obligations under those agreements. This condition ensures that only developers in good standing are granted further franchise opportunities.
Another condition affecting the addendum's provisions relates to site selection and development. The developer must submit a completed site approval package, and no site is considered approved unless Black Bear Diner provides explicit written approval. Furthermore, once a site is approved, the franchisee has a strict timeline of 365 days to open and begin operating the restaurant. Failure to meet this deadline grants Black Bear Diner the right to terminate the Franchise Agreement immediately, without any opportunity for the franchisee to rectify the situation.
Finally, the addendum also addresses termination scenarios. If a developer fails to comply with any material term or condition of the Development Agreement, or any Franchise Agreement, Black Bear Diner can issue a termination notice. The developer then has a limited window, typically 30 days, to cure the default to Black Bear Diner's satisfaction. If the default remains uncured, the Development Agreement and all associated rights are terminated, highlighting the importance of strict adherence to the agreement's terms.