For Black Bear Diner, what is the franchisee's responsibility regarding contracts with third-party suppliers?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
er we designate. If we or our affiliates designate that such goods and/or services are to be purchased through approved third party suppliers, then you must purchase such goods and/or services from such suppliers according to the terms and in the manner which we approve. We may designate only one exclusive supplier for any product and/or service.
If we designate one or more exclusive suppliers for a particular good or service, you may not request to utilize an alternative supplier. However, if an exclusive supplier has not been designated and you desire to use any item, service or supplier in operating the Franchised Restaurant that we have not approved (for items or services that must meet our specifications or require supplier approval), you will first send us sufficient information, specifications and/or samples for us to determine whether the item or service complies with our standards and specifications or the supplier meets our criteria. We may charge a reasonable fee for inspection and/or testing, not to exceed $1,000, and will decide within a reasonable time, typically 30 days, after receiving all requested information whether any proposed item or service meets our specifications or if you may purchase or lease items or services from a proposed supplier. We apply the following general criteria in approving a proposed supplier: ability to provide sufficient quantity of product; quality of products and/or services at competitive prices; production and delivery capability; dependability and general reputation of the supplier and willingness to pay us a fee to join our key vendor network. In addition, suppliers of food products must meet our standards for testing and auditing to assure quality, safety and nutrition. We will notify you in writing of our decision regarding the approval or disapproval of any supplier or item or service. In addition, we will notify you in writing of our revocation of approval of any supplier, or of any item or service no longer meeting our specifications. You may be required to sign contracts with third party suppliers in the form they specify.
Fountain Beverages. We currently maintain purchasing and pricing arrangements for the supply of fountain and packaged beverages including soft drinks, teas, waters, isotonics, energy drinks, juices, juice drinks, dairy-based and coffee-based beverages. Pepsi and Dr. Pepper are the only approved beverage lines for your Franchised Restaurant. You must feature and exclusively purchase your requirements of beverage products from full-line suppliers of Pepsi and Dr. Pepper
products. Certain funds will be paid by beverage suppliers directly to qualifying franchisees and others to us. These funds may be designated for general and in-store advertising, system-wide promotions and/ or franchise conventions.
Merchant and Gift Cards. We require all franchisees to accept major credit cards for customer purchases. You may be required to invest in additional equipment and incur fees from the credit card vendors that we designate. We also have an electronic gift card program and you must participate in this program.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 22–26)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, franchisees are generally required to purchase goods and services from approved suppliers, and may be required to sign contracts with these suppliers in the form that the suppliers specify. Black Bear Diner retains the right to approve or designate suppliers, contractors, manufacturers, vendors, distributors, producers, terms, and distribution methods for goods and services, including insurance, products, equipment, supplies, and materials. If Black Bear Diner designates that goods and/or services are to be purchased through approved third-party suppliers, franchisees must purchase such goods and/or services from those suppliers according to the terms and in the manner approved by Black Bear Diner. Black Bear Diner may designate only one exclusive supplier for any product and/or service.
If Black Bear Diner has not designated an exclusive supplier and a franchisee wants to use an unapproved item, service, or supplier, the franchisee must submit sufficient information, specifications, and/or samples to Black Bear Diner for approval. Black Bear Diner may charge a fee for inspection and/or testing, up to $1,000, and will typically decide within 30 days whether the item, service, or supplier meets their criteria. The general criteria for approving a supplier include their ability to provide sufficient quantity of product, the quality of products and/or services at competitive prices, production and delivery capability, dependability, general reputation, and willingness to pay a fee to join Black Bear Diner's key vendor network. Food product suppliers must also meet standards for testing and auditing to assure quality, safety, and nutrition.
Black Bear Diner also has specific requirements for certain products and services. For example, Pepsi and Dr. Pepper are the only approved beverage lines, and franchisees must exclusively purchase their beverage product requirements from full-line suppliers of these products. Franchisees are also required to use a computer system, including hardware and software, from approved suppliers and may be required to pay monthly licensing fees directly to Black Bear Diner for software use. Additionally, franchisees must participate in Black Bear Diner's electronic gift card program and accept major credit cards, potentially requiring investment in additional equipment and incurring fees from designated credit card vendors. A sole supplier is designated for the digital jukebox, which franchisees will lease along with procuring the appropriate music rights licenses. The current lease rate is $350 a month, but this is subject to change.