For Black Bear Diner franchises in Minnesota, when are initial fees and payments deferred?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the Minnesota Franchise Law, Minn. Stat., Chapter 80C, Sections 80C.01 through 80C.22, and the Rules and Regulations promulgated pursuant thereto by the Minnesota Commission of Securities, Minnesota Rule 2860.4400, et. seq., the parties agree as follows:
Section 3.1 of the Franchise Agreement shall be amended to add:
Based upon the franchisor's financial condition, the Minnesota Department of Commerce Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until the franchisor completes its pre-opening obligations under the franchise agreement. In addition, all development fees and initial payments by area developers shall be deferred until the first franchise under the development agreement opens.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, Minnesota franchisees benefit from a specific financial protection under Minnesota law. Due to the franchisor's financial condition, the Minnesota Department of Commerce Commissioner mandates a financial assurance. As a result, all initial fees and payments owed by Black Bear Diner franchisees in Minnesota are deferred. This deferral lasts until Black Bear Diner completes its pre-opening obligations as outlined in the franchise agreement. This protection also extends to area developers, where development fees and initial payments are deferred until the first franchise under their development agreement opens.
This deferral of initial fees and payments provides a significant advantage for prospective Black Bear Diner franchisees in Minnesota. It reduces the upfront financial burden, allowing franchisees to conserve capital during the initial setup phase. This can be particularly beneficial for managing construction costs, securing real estate, and covering initial operating expenses.
However, it is important to note that while the initial fees are deferred, they are still ultimately owed to Black Bear Diner once the pre-opening obligations are fulfilled. Franchisees should carefully plan their finances to ensure they can meet these obligations when they come due. Additionally, franchisees should confirm with Black Bear Diner and the Minnesota Department of Commerce any specific conditions or requirements related to this deferral to ensure full compliance with state regulations.