What is the development fee for Black Bear Diner if developing 3 franchised restaurants?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
chedule:
| Number of Franchised Restaurants to be Developed | Franchise Fee | Development Fee |
|---|---|---|
| 1 | $55,000 | |
| 2 | $45,000 | $22,500 |
| 3 | $40,000 | $20,000 |
| 4-7 | $32,000 | $16,000 |
| 8+ | $24,000 |
Source: Item 5 — INITIAL FEES (FDD pages 13–14)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the development fee for developing 3 franchised restaurants is $20,000 per restaurant. This fee is in addition to the initial franchise fee, which is $40,000 per restaurant when developing 3 locations.
When a prospective franchisee enters into an Area Development Agreement with Black Bear Diner, they commit to opening a specific number of restaurants within a defined territory and timeframe. In exchange for this commitment, Black Bear Diner offers a reduced franchise fee for each location beyond the first. The development fee compensates Black Bear Diner for its commitment to reserve that territory for the developer and provide support during the development phase.
It's important to note that the development fee is non-refundable, even if the franchisee fails to open all of the agreed-upon restaurants. This highlights the importance of carefully evaluating the market potential and the franchisee's ability to meet the development schedule before entering into an Area Development Agreement with Black Bear Diner. The initial franchise fee also varies depending on the number of restaurants the franchisee commits to developing.