When is the Franchise Fee paid to Black Bear Diner?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
24,000 |
The Franchise Fee is paid to us in a lump sum at the time of signing the Franchise Agreement and is deemed to be fully earned upon receipt and is generally non-refundable. The Franchise Fee is uniform for all franchisees except if you develop multiple Franchised Restaurants under an Area Development Agreement described below. For our most recent fiscal year ended December 25, 2024, the initial Franchise Fee ranged from $24,000 to $55,000. The Franchise Fee is used to compensate us for training and other preopening obligations and is non-refundable under any circumstances.
Area Development Agreement. Under the Area Development Agreement, you are required to execute one Franchise Agreement and pay the Franchise Fee for the first Franchised Restaurant simultaneously with the execution of the Area Development Agreement.
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 Franchise Fee is paid in a lump sum when signing the Franchise Agreement. Black Bear Diner considers the fee fully earned upon receipt and states that it is generally non-refundable. For the fiscal year ending December 25, 2024, the initial Franchise Fee ranged from $24,000 to $55,000. This fee compensates Black Bear Diner for training and other pre-opening obligations.
For franchisees developing multiple Black Bear Diner restaurants under an Area Development Agreement, the timing of the Franchise Fee payment for the first restaurant remains the same: it is due upon signing the Franchise Agreement and the Area Development Agreement. However, the fee amount for subsequent restaurants is determined by a schedule based on the number of restaurants the franchisee commits to develop. A Development Fee, equal to 50% of the initial Franchise Fee for each restaurant after the first, is also required under the Area Development Agreement.
For franchisees entering into a Development Agreement, a Development Fee equal to 50% of the initial Franchise Fee is due for each restaurant after the first. For example, if a franchisee agrees to develop 5 Black Bear Diner restaurants, they will pay the $55,000 franchise fee for the first restaurant and a Development Fee for the remaining 4 restaurants. When the franchisee executes a Franchise Agreement for the second and subsequent restaurants, they will pay the Franchise Fee as stated in the chart; however, they will receive a credit in the amount of the Development Fee they paid per Franchised Restaurant under the Development Agreement, meaning the balance due will be 50% of the Franchise Fee. The Development Fee is earned when paid and is non-refundable, even if the franchisee does not fulfill their obligations under the agreement.
It is important to note that the initial Franchise Fee varies depending on the number of Black Bear Diner restaurants the franchisee commits to developing. The more restaurants a franchisee agrees to develop, the lower the Franchise Fee for each individual location. This fee structure incentivizes multi-unit development. Prospective franchisees should carefully consider their development plans and financial capabilities before committing to a specific number of restaurants under an Area Development Agreement, as the Development Fee is non-refundable.