Can Black Bear Diner withhold consent for a Transfer for any reason?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
t permit the identity of such owners, or their respective interests in Developer, to change without complying with this Agreement. Franchisor shall have the right to designate any person or entity which owns a direct or indirect interest in Developer as a Principal, and Exhibit C shall be so amended automatically upon notice thereof to Developer. Throughout the term of this Agreement, Franchisor shall have a continuing right to designate as a Principal any person or entity that owns a direct or indirect interest in Developer.
- 7.2.2 This Agreement has been entered into by Franchisor in reliance upon and in consideration of the individual or collective character, reputation, skill, attitude, business ability, and financial capacity of Developer or, if applicable, its Principals who will actively and substantially participate in the development, ownership and operation of the Black Bear Diner restaurants.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 FDD, Black Bear Diner enters into the Development Agreement based on the character, reputation, skill, attitude, business ability, and financial capacity of the Developer or its Principals. This suggests that Black Bear Diner places significant importance on the qualities and capabilities of those who will be developing, owning, and operating the Black Bear Diner restaurants.
The agreement states that the Developer must not permit changes to the identity or interests of its owners without complying with the agreement. Black Bear Diner retains the right to designate any person or entity owning an interest in the Developer as a Principal, amending Exhibit C of the agreement accordingly. This ongoing right to designate Principals allows Black Bear Diner to maintain control over who is involved in the development and operation of the restaurants.
While the FDD excerpt does not explicitly state the reasons for which Black Bear Diner can withhold consent for a transfer, the emphasis on the qualities and control over the Principals implies that Black Bear Diner can likely withhold consent if the proposed transferee does not meet their standards for character, reputation, skill, attitude, business ability, or financial capacity. A prospective franchisee should seek clarification from Black Bear Diner regarding the specific conditions under which a transfer may be denied.