What aspects of accounting policies are evaluated during the audit of Black Bear Diner?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
ovides additional information about the Companyowned and franchised restaurants operating as of December 25, 2024 and December 27, 2023:
| Cash flows from investing activities: | | | |---|---|---| | ( 168,891) | ( 296,015) | | | Purchases of property and equipment | | | | Net cash used in investing activities | ( 168,891) | ( 296,015) | The Company-owned restaurants are operated by Bear Tracks Holdings LLC (BTH), an entity under common control with the Company. The Company and BTH are owned by BBD Opco LLC (Parent). BBD Opco LLC is owned by BBD Intermediate Holdco, LLC (Intermediate) and for which Intermediate is ultimately owned by BBD Holdco LLC (Holdco).
The Company also operates a national advertising fund (NAF) which administers national, regional, and local advertising and marketing initiatives for the brand. The Company receives funds from Black Bear Diner branded restaurants approximating 1.00% of revenue. The Company physically segregates these funds to ensure that the funds are utilized specifically for advertising and other brand development initiatives as defined in the respective franchise agreements. From time to time, the Company utilizes the funds received from franchisees for advertising purposes as reimbursement of its costs, including salaries and other internal costs of administering the NAF. The reimbursements totaled $172,139 and $118,881 for the years ended December 25, 2024 and December 27, 2023, respectively, and are netted within payroll and benefits expenses on the statements of income. The production costs of advertising are expensed when the advertisements are first aired or displayed. All other advertising and promotional costs are expensed in the period incurred.
Use of Estimates: The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner FDD, the company operates a national advertising fund (NAF) that administers advertising and marketing initiatives. The FDD states that the company receives funds approximating 1.00% of revenue from Black Bear Diner branded restaurants. These funds are physically segregated to ensure they are used specifically for advertising and brand development initiatives, as defined in the franchise agreements.
From time to time, Black Bear Diner uses franchisee funds for advertising purposes as reimbursement for its costs, including salaries and other internal costs of administering the NAF. The reimbursements totaled $172,139 and $118,881 for the years ended December 25, 2024 and December 27, 2023, respectively, and are netted within payroll and benefits expenses on the statements of income. The production costs of advertising are expensed when the advertisements are first aired or displayed, and all other advertising and promotional costs are expensed in the period incurred.
The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of revenue and expenses during the reporting period. Significant estimates made by management include estimated useful lives and carrying value of long-lived assets and the valuation of intangible assets and goodwill. The company utilizes a 52/53-week fiscal year ending on the last Wednesday prior to December 31. The company's financial statements reflect accounts and balances as of and for the fiscal years ended December 25, 2024 and December 27, 2023, which both contained 52 weeks.