When is the Development Fee fully earned by Black Bear Diner?

According to Black Bear Diner's 2025 Franchise Disclosure Document, the Development Fee is fully earned when paid. This means that Black Bear Diner earns the Development Fee as soon as the franchisee pays it, regardless of whether the franchisee fulfills their obligations under the Development Agreement.

This has significant implications for prospective franchisees. The FDD states that the Development Fee is not refundable under any circumstances, even if the franchisee does not open all of the restaurants outlined in the Development Agreement. For example, if a franchisee agrees to develop five Black Bear Diner restaurants but only opens three, they will not receive a refund for the Development Fees paid for the two un-opened locations.

This policy is not uncommon in the franchise industry, as initial fees are typically used to cover the franchisor's administrative and pre-opening expenses. However, franchisees should carefully consider their ability to meet the development schedule before entering into a Development Agreement with Black Bear Diner, as failure to do so could result in the loss of the Development Fees.