How does Black Bear Diner monitor its accounts receivable?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
erwise payable by Franchisor. In no circumstances shall Franchisee have any obligation hereunder for any tax assessed which is based upon the net income of Franchisor.
3.5 Electronic Transfer
Franchisor requires all Royalty Fee payments, Marketing Fund Contributions, product purchases and other amounts due to Franchisor to be paid through an Electronic Depository Transfer Account. Franchisee agrees to establish an account providing for electronic funds transfer, and Franchisor shall have access to such account for the purpose of receiving amounts due to Franchisor from Franchisee. Franchisee agrees to execute any documents as Franchisor's or Franchisee's bank requires in order to implement the Electronic Deposit Transfer Account. Franchisee agrees not to close the Electronic Deposit Transfer Account without Franchisor's approval. A copy of Franchisor's current form of authorization known as the "Authorization Agreement For Automatic Debit" is included as Exhibit E.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Black Bear Diner requires franchisees to make payments via Electronic Depository Transfer Account for all Royalty Fees, Marketing Fund Contributions, product purchases, and other amounts owed to Black Bear Diner. Franchisees must establish an account that allows for electronic funds transfer, granting Black Bear Diner access to receive these payments.
To facilitate this process, franchisees must execute any documents required by Black Bear Diner's or the franchisee's bank to implement the Electronic Deposit Transfer Account. Furthermore, franchisees are prohibited from closing this account without prior approval from Black Bear Diner. This electronic transfer system ensures that Black Bear Diner has a direct and consistent method for receiving payments, which aids in monitoring accounts receivable.
Additionally, Black Bear Diner requires franchisees to furnish an accounting of Local Advertising expenditures within thirty days of each month's end. This accounting, in a form designated by Black Bear Diner, allows the company to monitor whether franchisees are meeting their local advertising obligations, which are set at a minimum of one percent of the previous month's Gross Sales. This requirement provides another layer of financial oversight, ensuring franchisees are adhering to their contractual obligations regarding marketing and advertising spend.