What was the reported royalty revenue from related parties for Black Bear Diner in 2022?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
management of the Company, who have attained age 21 and have completed one year of eligible service. Contributions to the Plan include (1) the amount of salary reduction elections of all participants, (2) employer-matching contributions equal to 50% of the matched employee contributions, not to exceed 6% of the employee's contributions, and (3) a discretionary employer profit sharing amount. All contributions are limited to the maximum amount allowed for federal income tax purposes. For the yea
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the company recognized royalty income from related parties. Specifically, Black Bear Diner reported $7,600,569 in royalty income from Bear Tracks Holdings LLC (BTH) for the year ended December 28, 2022. BTH is an entity under common control with Black Bear Diner, as both are subsidiaries of BBD Opco LLC.
This royalty income stems from a trademark license agreement that requires BTH to pay Black Bear Diner a 4.50% royalty on its revenue. This related-party transaction is disclosed in the financial statements to provide transparency about the financial relationships between Black Bear Diner and its affiliated entities.
For a prospective franchisee, this indicates that a significant portion of Black Bear Diner's royalty revenue comes from its own company-operated restaurants. While this is not inherently negative, a franchisee might want to further investigate the performance of these company-owned locations and how they compare to franchised locations. Understanding the dynamic between franchisor-owned and franchisee-owned locations can be a critical part of assessing the overall health and sustainability of the Black Bear Diner franchise system.