Does the Black Bear Diner franchise agreement allow for sale leaseback transactions?

Based on the 2025 Franchise Disclosure Document, the excerpts provided do not explicitly discuss sale-leaseback transactions for Black Bear Diner franchises. While the document details various aspects of site selection, lease agreements, and financial obligations, it does not specify whether a franchisee is permitted to enter into a sale-leaseback arrangement for their restaurant property.

However, the FDD does state that "For each Black Bear Diner restaurant to be developed hereunder, Developer shall execute a lease/sublease that complies with the applicable provisions of the Franchise Agreement, or a binding agreement to purchase the site." This suggests that franchisees have the option to either lease or purchase the property for their Black Bear Diner location. The absence of specific restrictions on sale-leaseback transactions could imply that they are permissible, provided they comply with the general requirements of the Franchise Agreement.

To gain clarity, prospective Black Bear Diner franchisees should directly inquire with the franchisor about their policy on sale-leaseback transactions. Specifically, they should ask whether such arrangements are allowed, what conditions or restrictions apply, and if the franchisor has any preferred providers or guidelines for these types of transactions. Understanding the franchisor's stance on sale-leaseback transactions is crucial for making informed financial decisions about the franchise investment.