Is the Franchise Fee uniform for all Black Bear Diner franchisees?
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. Under the terms of the Area Development Agreement, the Franchise Fee for each Franchised Restaurant is based on the number of Black Bear Diner restaurants you agree to develop according to the following schedule:
| 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 franchise fee is not uniform for all franchisees. While the initial franchise fee for a single Black Bear Diner restaurant is $55,000, the fee varies for franchisees who develop multiple restaurants under an Area Development Agreement. For the fiscal year ended December 25, 2024, the initial franchise fee ranged from $24,000 to $55,000.
For franchisees developing multiple Black Bear Diner restaurants, the franchise fee is determined by the number of restaurants they commit to developing. The more restaurants a franchisee agrees to develop, the lower the franchise fee for each subsequent location. This tiered structure incentivizes multi-unit development. A development fee, equal to 50% of the initial franchise fee, is required for each restaurant after the first, with a credit applied when the franchise agreement for each subsequent restaurant is executed.
Specifically, the franchise fee schedule outlines different fees based on the number of restaurants to be developed. For instance, the fee is $55,000 for developing one restaurant, $45,000 for two, $40,000 for three, $32,000 for four to seven, and $24,000 for eight or more. This fee structure is designed to support and encourage larger-scale development plans by offering reduced fees as the franchisee's commitment increases. The development fee is earned when paid and is non-refundable, even if the franchisee doesn't fulfill their development obligations.