For Black Bear Diner franchises in Minnesota, when are initial fees and payments deferred until?
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 amendment to the franchise agreement regarding the payment of initial fees. 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 until Black Bear Diner completes its pre-opening obligations as outlined in the franchise agreement. This deferral also applies to development fees and initial payments for area developers, which are deferred until the first franchise under the development agreement opens.
This amendment provides a significant financial benefit and reduced risk for new Black Bear Diner franchisees in Minnesota. By deferring the initial fees, franchisees are not required to make these payments until Black Bear Diner has fulfilled its obligations to prepare the franchise for opening. This helps to align the interests of both parties and ensures that the franchisee's investment is tied to the progress of the franchise setup.
It is important for prospective franchisees in Minnesota to understand the specific pre-opening obligations that Black Bear Diner must fulfill before the initial fees become due. These obligations are detailed in the franchise agreement and should be carefully reviewed. Franchisees should also confirm with the franchisor the exact timing and conditions for when the deferred fees will become payable to avoid any misunderstandings or disputes.