What was the total value of Black Bear Diner's related-party receivable in 2022?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
nse agreement that requires BTH to pay a 4.50% royalty to the Company. The Company recognized $8,041,863 and $7,600,569 of royalty income from BTH for the years ended December 27, 2023 and December 28, 2022, respectively, which is included in the statements of income.
Allocated Administrative Services: The Company also shares certain management and administrative functions with BTH. The Company charged BTH the amount of $3,153,562 and $2,983,206 for allocable share of management and administrative expenses and is rec for the years ended December 27, 2023 and December 28, 2022, respectively, which is included with payroll and benefits expenses in the statements of income.
Related-Party Receivable: The related-party receivable is unsecured, interest free and repayable on demand. The related-party receivable at any point in time generally consists of any combination of receivables from royalty and advertising fees, receivables
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to Black Bear Diner's 2025 Franchise Disclosure Document, the related-party receivable is unsecured, interest-free, and repayable on demand. It generally consists of receivables from royalties and advertising fees, allocations of shared management and administrative functions, gift card receivables from BTH-owned restaurants, and periodic working capital advances to entities under common control. As of December 28, 2022, the allocated administrative services receivable included within the related-party receivable totaled $226,604. The amounts outstanding as of December 28, 2022, were collected in full after the year-end.
For a prospective Black Bear Diner franchisee, this indicates that the company engages in transactions with related parties, specifically Bear Tracks Holdings LLC (BTH). These transactions include royalty payments from BTH to Black Bear Diner and allocations for shared administrative services. The related-party receivable represents the amounts owed to Black Bear Diner by these related entities at a specific point in time.
The fact that the related-party receivable is unsecured and interest-free suggests a degree of trust and flexibility between Black Bear Diner and its related entities. However, it also carries a risk, as there are no guarantees or interest accruing on these receivables. The disclosure that the outstanding amounts were collected in full after the year-end provides some reassurance about the collectability of these receivables. Franchisees should be aware of these related-party transactions and how they might affect the financial performance of Black Bear Diner.