What are the implications if a Black Bear Diner franchisee fails to meet supplier requirements?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
We do not provide or withhold material benefits to you (such as renewal rights or the right to open additional Franchised Restaurants) based upon whether you purchase through the sources we designate or approve; however, purchases of unapproved products or from unapproved suppliers in violation of the Franchise Agreement will entitle us, among other things, to terminate the Franchise Agreement. You must allow us or our representative to conduct inspections on at least a monthly basis. These inspections may be conducted at any time and you must immediately t
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 estimate that approximately 80% to 90% of your expenditures for leases and purchases in establishing your Franchised Restaurant and approximately 30% to 40% of your expenditures on an ongoing basis will be for goods and services which must be purchased from approved or designated sources or in accordance with our specifications.
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 obligated to purchase goods and services from approved suppliers. Failure to comply with these requirements can lead to serious repercussions, including the termination of the Franchise Agreement. Black Bear Diner retains the authority to designate specific suppliers for goods and services, and franchisees must adhere to these designations.
If a franchisee wishes to use an alternative supplier that hasn't been approved, they must submit the supplier's information, specifications, and/or samples to Black Bear Diner for evaluation. Black Bear Diner may charge a fee, up to $1,000, for inspecting and testing the proposed item or service. The franchisor will then decide, typically within 30 days, whether the item, service, or supplier meets their standards. Approval criteria include the supplier's ability to provide sufficient quantities, the quality of products and services at competitive prices, production and delivery capabilities, dependability, general reputation, and willingness to pay a fee to join Black Bear Diner's key vendor network. Food product suppliers must also meet specific standards for testing and auditing to ensure quality, safety, and nutrition.
Black Bear Diner does not offer material benefits, such as renewal rights or the right to open additional franchises, based on whether a franchisee purchases from designated or approved sources. However, non-compliance with the approved supplier requirements constitutes a violation of the Franchise Agreement, potentially leading to its termination. Black Bear Diner or its representatives conduct inspections at least monthly, and franchisees must allow these inspections to occur at any time.
Approximately 30% to 40% of a franchisee's ongoing expenditures will be for goods and services that must be purchased from approved or designated sources or in accordance with Black Bear Diner's specifications. This highlights the importance of maintaining compliance with supplier requirements to avoid potential penalties and ensure the smooth operation of the franchise.