Can Black Bear Diner terminate the Marketing and Advertising Fund?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Although we intend the Fund to be of perpetual duration, We maintain the right to terminate the Fund and return all unexpended funds to you and other franchisees on a pro rata basis based on contributions for the last 12 months prior to the Fund being terminated. An accounting of the operation of the Fund shall be prepared annually and shall be made available to you and other franchisees upon request. We may elect but are not required to have an audit performed of the Fund statements.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 28–35)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, Black Bear Diner does maintain the right to terminate the Marketing and Advertising Fund. If Black Bear Diner terminates the fund, all unexpended funds will be returned to franchisees and the franchisor on a pro rata basis. This pro rata distribution will be based on contributions made during the 12 months prior to the fund's termination.
Black Bear Diner intends for the Marketing and Advertising Fund to be of perpetual duration, but the option to terminate it remains with the franchisor. An accounting of the fund's operation is prepared annually and made available to franchisees upon request. While an audit of the fund statements may be elected, it is not required.
This clause provides Black Bear Diner with flexibility regarding the Marketing and Advertising Fund. While the franchisor aims to manage the fund to benefit the Black Bear Diner system, the possibility of termination exists, which could impact future marketing strategies and franchisee contributions. Prospective franchisees should consider this when evaluating the long-term marketing support provided by the franchise.