Is the development fee refundable for a Black Bear Diner franchise?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
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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. In the case of each Franchised Restaurant after the first one, we will credit against the Franchise Fee the amount of the Development Fee paid with respect to each Franchised Restaurant for which you are signing a Franc
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 is not explicitly described as refundable. However, the document does state that the initial franchise fee is partially refundable under certain circumstances, as detailed in Item 5. If a franchisee enters into a Development Agreement to open 5 franchised restaurants, they will pay a Development Fee of $74,500, broken down into increments of $22,500, $20,000, $16,000, and $16,000. The initial Franchise Fee for the first restaurant is $55,000, due upon signing the Franchise Agreement.
For each restaurant after the first, the franchise fee ranges from $24,000 to $45,000, depending on the number of restaurants to be developed. Black Bear Diner will credit the amount of the Development Fee paid for each restaurant against the Franchise Fee for each subsequent restaurant. This means that while the development fee itself may not be returned as cash, it effectively reduces the franchise fees for the additional restaurants developed under the agreement.
Prospective franchisees should carefully review Item 5 of the 2025 FDD to understand the specific conditions under which the franchise fee is partially refundable. They should also clarify with Black Bear Diner the exact terms of the Development Agreement and how the development fee is applied as a credit against future franchise fees. Understanding these details is crucial for assessing the overall financial commitment and potential return on investment when developing multiple Black Bear Diner locations.