What is the Development Fee for a Black Bear Diner Area Development Agreement?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
d Restaurants.
| Type of Expenditure(1) | Amount | Method of Payment | When Due | To Whom Paid | |
|---|---|---|---|---|---|
| Development Fee(2) | $74,500 | Lump Sum | At Signing of Area Development Agreement | Us | |
| Franchise Fee For First Franchised Restaurant | $55,000 | Lump Sum | At Signing of Franchise Agreement | Us | |
| Other Expenditures For 1st Franchised Restaurant(3) | $1,546,200 to $2,349,000 | As Disclosed in Preceding Table | As Disclosed in Preceding Table | See Preceding Table | |
| TOTAL(4) | $1,675,700 to $2,478,500 | ### EXPLANATORY NOTES |
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- Type of Expenditure. In general, all payments including the Franchise Fee, are nonrefundable. The Franchise Fee is partially refundable under certain circumstances. We do not finance any portion of your initial investment.
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- Development Fee. If you enter into a Development Agreement requiring you to open 5 Franchised Restaurants, you will pay a Development Fee of $74,500 ($22,500+$20,000+$16,000+$16,000). The initial Franchise Fee for your first Franchised Restaurant is $55,000 and is due upon signing the Franchise Agreement. The Franchise Fee for each additional Franchised Restaurant ranges from $24,000 to $45,000 depending on the number of restaurants to be developed.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT YOUR ESTIMATED INITIAL INVESTMENT (FRANCHISE AGREEMENT) (FDD pages 18–22)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, the Development Fee for an Area Development Agreement is $74,500. This fee is paid as a lump sum when signing the Area Development Agreement. The example provided in the FDD is based on an agreement to develop 5 Black Bear Diner restaurants.
It's important to note that this Development Fee covers the right to develop multiple Black Bear Diner locations within a specific area. The initial Franchise Fee for the first restaurant is $55,000, payable upon signing the Franchise Agreement for that location. For each subsequent restaurant developed under the Area Development Agreement, a franchise fee ranging from $24,000 to $45,000 will be required.
The FDD states that Black Bear Diner will credit the Development Fee paid for each restaurant against the Franchise Fee due for that specific location. This means that the $74,500 Development Fee is essentially an advance payment towards the franchise fees for the restaurants developed under the agreement. The FDD also clarifies that, in general, all payments, including the Franchise Fee, are non-refundable, although the Franchise Fee is partially refundable under certain circumstances.
Prospective franchisees should carefully consider the financial implications of an Area Development Agreement, including the Development Fee and the subsequent Franchise Fees for each location. It is advisable to consult with a business advisor or accountant to fully understand the costs and obligations involved before entering into such an agreement with Black Bear Diner.