What do lease liabilities represent for Black Bear Diner?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
he Approved Location be collaterally assigned to Franchisor pursuant to the terms of its standard collateral assignment of lease form, to secure the performance by Franchisee of the obligations under this Agreement.
Franchisor's review of the lease or any advice or recommendation offered by Franchisor shall not constitute a representation or guarantee that Franchisee will succeed at the Approved Location or an expression of Franchisor's opinion regarding the terms of the lease**.**
If Franchisee does not consummate a lease for the Approved Location within 180 days from the date of this Agreement, Franchisor shall have the right terminate this Agreement immediately on notice without any need for a cure opportunity.
5.3 Development of Approved Location
After Franchisee has selected and obtained Franchisor's approval of the site for the Franchised Restaurant, Franchisee agrees to develop the site in accordance with the following procedures:
Franchisor will provide to Franchisee copies of Franchisor's standard plans and specifications for the design and layout of the exterior and interior of a typical Black Bear Diner restaurant including fixtures, equipment, furnishings, décor and signs. Franchisee assumes all cost, liability and expense for the construction, renovation or remodeling at the Approved Location. If any alterations are required to be made to the standard plans and specifications, such alterations
must be approved by Franchisor in writing before any work is begun on the Franchised Restaurant. It shall be Franchisee's responsibility to submit the final plans and layout to the Franchisor for written approval. Nothing in this section shall be construed as an endorsement or guarantee of the conformity of such plans to applicable local, state or federal building or safety codes. Franchisee agrees that it is responsible for the accuracy of all drawings, plans and specifications used for the construction, renovation or remodeling of the Franchised Restaurant.
Franchisee may not begin site preparation or construction prior to receiving written notification from Franchisor that it has approved the plans. All construction, renovation or remodeling must be in accordance with the plans approved by Franchisor and must comply in all respects with applicable laws. The Franchised Restaurant may not open if construction, renovation or remodeling has not been performed in substantial compliance with plans approved by Franchisor.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the excerpts provided do not specify what lease liabilities represent for Black Bear Diner franchisees. However, the FDD does address certain aspects of leasing a location for a Black Bear Diner restaurant.
The FDD states that the franchisor's review of a lease does not guarantee the franchisee's success at the approved location. The franchisee is responsible for securing a lease within 180 days of the agreement, and they bear all costs associated with construction, renovation, or remodeling. The franchisee must use Black Bear Diner's standard plans and specifications for the restaurant's design and layout, and any alterations must be approved by the franchisor.
Upon termination or expiration of the franchise agreement, Black Bear Diner may request the franchisee to assign their interest in the lease to the franchisor. The FDD also mentions that for each Black Bear Diner restaurant to be developed, the developer must execute a lease/sublease that complies with the franchise agreement or a binding agreement to purchase the site.
To fully understand what lease liabilities represent for a Black Bear Diner franchisee, it is recommended to ask the franchisor directly about the specific financial obligations and responsibilities associated with leasing a location, including details on rent, security deposits, maintenance, and potential penalties for early termination.