Is the franchisee required to reimburse Black Bear Diner for costs related to relocation?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Under the Franchise Agreement, you will be granted the right to develop and operate a Franchised Restaurant at a specific location that first must be approved by us. You may not relocate the Franchised Restaurant without our prior written consent. If, prior to the termination or expiration of the Franchise Agreement, the lease or sublease for your Black Bear Diner restaurant location expires or terminates without your fault, or if the premises are destroyed, condemned or otherwise rendered unusable, we will permit you to relocate your Black Bear Diner restaurant to a new site acceptable to us. Any relocation will be at your sole expense, including reimbursing us for all reasonable costs and expenses that we may incur in connection with evaluating, approving and/or implementing the relocation. You also must indemnify us against all loss, liability, costs and expenses that we may incur in connection with any aspect of the relocation process.
Source: Item 12 — TERRITORY (FDD pages 35–37)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, franchisees are responsible for covering all expenses associated with relocating their restaurant. Specifically, if the lease expires or terminates without the franchisee's fault, or if the premises become unusable due to destruction or condemnation, Black Bear Diner will allow the franchisee to relocate to a new, mutually acceptable site. However, this relocation comes with the stipulation that the franchisee must bear the full financial burden.
This financial responsibility includes reimbursing Black Bear Diner for all reasonable costs and expenses the company incurs while evaluating, approving, and implementing the relocation. This means that Black Bear Diner will likely charge the franchisee for its time, resources, and any third-party services used during the relocation process. Furthermore, the franchisee is obligated to indemnify Black Bear Diner against any losses, liabilities, costs, and expenses that may arise during any aspect of the relocation process.
This requirement places a significant financial burden on the franchisee during a relocation. It's important to note that the franchisee's financial responsibility extends beyond just the direct costs of moving the restaurant. It also includes covering Black Bear Diner's internal costs and protecting the company from any potential liabilities related to the relocation. Prospective franchisees should carefully consider these potential expenses and ensure they have sufficient financial resources to manage a relocation if it becomes necessary.
In the franchise industry, it is not uncommon for franchisees to bear the costs of relocation, but the extent of those costs can vary. Some franchisors may only require franchisees to cover direct moving expenses, while others, like Black Bear Diner, may also include reimbursement for the franchisor's internal costs and indemnification against liabilities. Therefore, prospective Black Bear Diner franchisees should carefully review the Franchise Agreement and seek legal counsel to fully understand their obligations regarding relocation expenses.