Under what conditions can the Black Bear Diner franchise agreement be terminated early?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
to this disclosure document.**
FRANCHISE AGREEMENT
| Provision | Section in the Franchise Agreement | Summary | |
|---|---|---|---|
| a. | Term of the franchise | Section 4.1 | The initial term begins when you sign the Franchise Agreement and expires 10 years from the date you actually open your Franchised Restaurant, unless earlier terminated for cause in accordance with the terms of the Franchise Agreement. |
| b. | Renewal or extension of the term | Section 4.2 | You may renew for an additional term of 10 years subject to (c) below. |
| c. | Requirements for you to renew or extend | Section 4.2 | To renew, you must have substantially complied with the provisions of the Franchise Agreement and not be in default at the time of renewal; maintain possession of the premises used in the operation of your Franchised Restaurant; make expenditures to remodel, modernize and redecorate to reflect the then current appearance of new Black Bear Diner restaurants; provide notice of your intent to renew; sign a new franchise agreement; meet current training requirements; pay a renewal fee of $5,000; and sign a general release. The terms of the new franchise agreement may contain materially different terms and conditions. |
| d. | Termination by you | Section 15.1 | If you are in compliance with the Franchise Agreement and we materially breach the Franchise Agreement and fail to cure or begin to cure within 30 days of receiving your written notice. |
| Provision | Section in the Area Development Agreement | Summary | |
| --- | --- | --- | --- |
| a. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 41–46)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the franchise agreement, which has an initial term of 10 years from the opening date of the restaurant, can be terminated early under certain conditions. The franchisee (you) can terminate the agreement if they are in compliance with the Franchise Agreement, and Black Bear Diner materially breaches the agreement, failing to cure or begin to cure the breach within 30 days of receiving written notice from the franchisee.
Conversely, the Area Development Agreement can be terminated by Black Bear Diner with cause if the franchisee breaches the agreement. Generally, the franchisee has 30 days to cure any defaults, except for certain non-curable defaults. These non-curable defaults include bankruptcy-related events, unapproved transfers, material misrepresentations in the application for the Development Agreement, conviction of a felony, unauthorized use of Black Bear Diner's Marks or Confidential Information, termination of a Franchise Agreement by Black Bear Diner for cause or by the franchisee without cause, or failure to meet the development obligations.
It is important to note that the termination of a Franchise Agreement by Black Bear Diner for cause, or by the franchisee without cause, can also lead to the termination of the Area Development Agreement. This highlights the interconnectedness of these agreements and the importance of adhering to the terms and conditions outlined in both. Prospective franchisees should carefully review the definitions of 'cause' and the specific obligations detailed in the agreements to fully understand the conditions under which termination can occur and the potential consequences.