Does Black Bear Diner negotiate purchase arrangements with suppliers for the benefit of Black Bear Diner franchisees?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Miscellaneous
As of the date of this disclosure document, you are not required to purchase any products or services from us or our affiliates. Presently, neither we nor our affiliates supply any products or services to our franchisees. We negotiate purchase arrangements with suppliers for the benefit of franchisees including terms for price, specifications, payment and volume discounts. Some suppliers pay fees to us based on their actual or prospective dealings with you, other franchisees and our affiliates. Most of these payments are based on a flat fee amount while others are calculated based on sales of products to you and our affiliate-owned restaurants. During our last fiscal year ended December 25, 2024, we received payments ranging from approximately $200 to $239,252 from various suppliers in consideration of purchases made by franchisees. Unless such rebates and revenue are earmarked for marketing programs or other purposes, we intend to utilize such the rebates and revenue for the reimbursement of our costs of sponsoring the annual Black Bear Diner Franchise Convention and for other franchisee eve
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, Black Bear Diner does negotiate purchase arrangements with suppliers for the benefit of its franchisees. These arrangements include terms for price, specifications, payment, and volume discounts. Some suppliers pay fees to Black Bear Diner based on their dealings with franchisees and affiliated restaurants. These payments can be a flat fee or calculated based on sales. During the fiscal year ending December 25, 2024, Black Bear Diner received payments ranging from approximately $200 to $239,252 from various suppliers due to franchisee purchases. Unless these rebates are specifically for marketing or other programs, Black Bear Diner intends to use them to offset the costs of the annual Black Bear Diner Franchise Convention and other franchisee events and services.
Black Bear Diner franchisees are generally required to purchase food, beverages, ingredients, equipment, furnishings, supplies, and other items from approved suppliers. Black Bear Diner reserves the right to approve or designate the suppliers, contractors, manufacturers, vendors, distributors, and the terms and distribution methods for goods and services. In some cases, franchisees may be required to purchase goods and services from a single exclusive supplier designated by Black Bear Diner.
If a franchisee wants to use a non-approved supplier or item, they must submit information and/or samples to Black Bear Diner for approval. Black Bear Diner may charge a fee for inspection and/or testing, up to $1,000, and will typically decide within 30 days whether to approve the item, service, or supplier. The criteria for approval include the supplier's ability to provide sufficient quantities, the quality of products and services at competitive prices, production and delivery capability, dependability, general reputation, and willingness to pay a fee to join Black Bear Diner's key vendor network. Food product suppliers must also meet standards for testing and auditing to assure quality, safety, and nutrition.
For the fiscal year ended December 25, 2024, Black Bear Diner received $1,256,689 in payments from required purchases by franchisees from approved or designated suppliers, representing approximately 5% of Black Bear Diner's total revenue of $23,550,484. Black Bear Diner estimates that 80% to 90% of a franchisee's expenditures for leases and purchases in establishing their restaurant and approximately 30% to 40% of their ongoing expenditures will be for goods and services that must be purchased from approved or designated sources or according to Black Bear Diner's specifications.