Under what grounds can I terminate the Black Bear Diner Area Development Agreement?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
rnia-specific disclosures.**
AREA DEVELOPMENT AGREEMENT
| Provision | Section in the Area Development Agreement | Summary | |
|---|---|---|---|
| a. | Length of the term of the Area Development Agreement | Section 5 | The rights granted under the Area Development Agreement expire on the earlier to occur of the actual opening date of the last of the Black Bear Diner restaurants required to be developed pursuant to the Development Schedule or the last day of the last Development Period under the Development Schedule. |
| b. | Renewal or extension of term | Not Applicable | |
| c. | Requirements for you to renew or extend | Not Applicable | |
| d. | Termination by you | You may terminate under any grounds permitted by law. | |
| e. | Termination by us without cause | Not Applicable | |
| f. | Termination by us with cause | Section 8 | If you breach the Area Development Agreement, we will have cause to terminate. |
| g. | "Cause" defined (defaults which can be cured) | Section 8 | Except for defaults in (h) below, you generally have 30 days to cure any defaults contained in the Area Development Agreement. |
| Provision | Section in the Area Development Agreement | Summary | |
| ---- | ----------------------------------------------------------------------------------------- | ---------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| h. | "Cause" defined (defaults which cannot be cured) | Section 8.1 and 9.1 | Non-curable defaults include: bankruptcy related events, any unapproved transfers, any material misrepresentations in the application for the Development Agreement; conviction of a felony; any unauthorized use of our Marks or Confidential Information; termination of a Franchise Agreement by us for cause or by you without cause; your failure to meet the development obligations. We can terminate the Development Agreement if we have delivered a notice of termination of a Franchise Agreement in accordance with its terms and conditions or you have terminated a Franchise Agreement without cause. |
| i. | Your obligation on termination/ non renewal | Section 9 | You have no further right to develop or operate any additional Franchised Restaurants; you may continue to own and operate all Franchised Restaurants under any existing Franchise Agreements; you must pay all amounts owed to us. |
| j. | Assignment of contract by us | Section 7.1 | There are no restrictions on our right to assign. |
| k. | "Transfer" by you definition | Section 7.2 | Includes transfer of the Area Development Agreement or changes in ownership of the business entity which owns the development rights. |
| l. | Our approval of transfer | Section 7.2 | Our prior written consent is required. |
| m. | Conditions for our approval of transfer | Section 7.2 | The proposed assignee must meet our criteria for experience, aptitude and financial resources and otherwise meets our standards for developers. |
| n. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION THE FRANCHISE RELATIONSHIP (FDD pages 41–46)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, a franchisee may terminate the Area Development Agreement under any grounds permitted by law. The Area Development Agreement term length expires when the last Black Bear Diner restaurant opens, as per the development schedule, or on the last day of the development period, as outlined in Section 5 of the agreement.
Black Bear Diner can terminate the Area Development Agreement if the franchisee breaches the agreement, as detailed in Section 8. Generally, the franchisee has 30 days to cure any defaults, except for specific non-curable defaults listed in Sections 8.1 and 9.1. 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, and failure to meet development obligations.
Upon termination of the Area Development Agreement, the franchisee loses the right to develop or operate additional franchised restaurants but can continue to own and operate existing franchised restaurants under existing Franchise Agreements, provided all amounts owed to Black Bear Diner are paid. It is important to note that the Area Development Agreement can only be modified or amended by a written agreement signed by both parties, as stated in Section 12.5. Any disputes will be mediated and then arbitrated in Redding, California, in accordance with Section 13.6, and California law governs the agreement, as per Section 13.1.