Under what conditions will I be required to pay for a Black Bear Diner audit?
Black_Bear_Diner Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor may require Franchisee to reimburse Franchisor for all costs incurred by Franchisor, or its representatives, in rendering advice and consultation or training.
If additional on-site evaluation is deemed necessary and appropriate by Franchisor (on its own initiative or at Franchisee's request) for any Black Bear Diner restaurant to be established, Developer shall reimburse Franchisor for all reasonable expenses incurred by Franchisor in connection with such on-site evaluation visit(s), including, without limitation, the cost of travel, lodging and meals.
Franchisor reserves the right, at its option, to require that such annual accounting include an audit of the operation of the Marketing Fund prepared by an independent certified public accountant selected by Franchisor and prepared at the expense of the Marketing Fund.
Source: Item 23 — RECEIPT (FDD pages 56–243)
What This Means (2025 FDD)
According to the 2025 Black Bear Diner Franchise Disclosure Document, franchisees may be required to reimburse Black Bear Diner for costs incurred for advice, consultation, or training. Additionally, if a franchisee requests additional on-site evaluations beyond the first one, they may be responsible for reimbursing Black Bear Diner for expenses related to the visit, including travel, lodging, and meals.
Furthermore, the FDD states that an accounting of the Marketing Fund's operation will be prepared annually and made available to franchisees upon request. Black Bear Diner reserves the right to require that the annual accounting include an audit of the Marketing Fund, prepared by an independent certified public accountant selected by Black Bear Diner, at the expense of the Marketing Fund. This means that while the franchisee doesn't directly pay for this audit, the costs are covered by the Marketing Fund, which franchisees contribute to.
These stipulations are fairly standard in franchising. Franchisees often bear the cost of ensuring compliance and receiving additional support, while marketing fund audits are typically covered by the fund itself to ensure transparency and proper management of pooled advertising resources. Prospective Black Bear Diner franchisees should factor these potential costs into their financial planning and understand the conditions under which they may be required to cover these expenses.