In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Black Bear Diner franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Black Bear Diner franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Black Bear Diner’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average, high, and low gross sales for the 48 franchised Black Bear Diner restaurants in operation for one year or longer and provided the franchisor with the necessary data as of the effective date of the 2016 Franchise Disclosure Document
Section I – Background Information
Dedicated to Serving Scratch Made Comfort Food
The first Black Bear Diner location was opened in Mount Shasta, California in 1995 by Bob Manley, Laurie Manley, and Bruce Dean. Over the next few years, the company opened additional locations in the California area and began franchising in 2002.
Black Bear Diner’s growth has been confined primarily to the Western United States. However, early last year, Black Bear Diner announced plans to expand the company nationally.
Bob Manley remains with the company as Black Bear’s Chief Brand Officer, while Bruce Dean holds the position of CEO. Manley is dedicated to ensuring all franchisees share Black Bear’s values of “human kindness, a win/win philosophy, and sense of humor.” Additionally, Manley makes sure that each Black Bear location maintains the “hominess” of the original restaurant.
As a 40+ year veteran of the restaurant industry, Dean oversees all facets of Black Bear Diner’s business, franchise, and menu development. Through the years, Dean has continued to drive the company’s growth. In addition to running the business side of Black Bear Diner, Dean is responsible for creating some of the recipes for Black Bear’s best-selling items. He also came up with the restaurant’s “bear-sized” portions, which mimic the large portions you would find with homemade comfort food.
Black Bear Diner Announces Plans to Go National
In early 2016, Black Bear Diner announced plans for a large national expansion. The company received an investment from PWP Growth Equity, a private equity fund managed by Perella Weinberg Partners that invests in growth-focused lower middle market companies.
The terms of the deal were not disclosed, but Black Bear plans to use the funds to invest in systems and processes to support its growth while adding locations in new and existing markets. Under the deal, all of Black Bear’s executive team will remain in their current roles.
Although growth has been slow and steady for most of the company’s history, Black Bear has experienced significant growth in recent years. In 2015, the company reported systemwide sales of $180 million, which was up 18 percent from 2014 system sales. Additionally, same-store sales had increased for 22 straight quarters through mid-2016.
Black Bear Diner Names New Chief Operating Officer to Head National Growth
Black Bear Diner announced in August 2016, that Tim Kaliher would be the company’s new Chief Operating Officer. Kaliher is the former Vice President of Operations for O’Charleys, Inc.
As the new COO, Kaliher will be responsible for leading Black Bear’s operational efficiency as the concept expands nationally. CEO Bruce Dean says that Kaliher’s “leadership, experience and operational savvy will ensure that [Black Bear Diner remains] efficient and effective in several aspects of [its] growth plan.”
Celebrating a Milestone and Opening New Locations
To mark the beginning of 2016, Black Bear Diner opened its 75th location in Chandler, Arizona. The company opened several more locations in 2016, and currently has over 80 units across 8 states. Black Bear Diner continues to grow as it opens new corporate and franchised locations.
Part of the recent growth is due to Black Bear’s push to open corporate-owned units in new markets. Also adding to Black Bear’s recent success is the company’s continued effort to open new franchised locations in existing markets and encouraging existing franchisees to open additional units.
Black Bear’s goal for the next few years is to open 100 new units by the end of 2018. The company’s plan for 2017 is to open 20 new locations.
New to Entrepreneur’s Franchise 500
Despite franchising for over a decade, Black Bear Diner has remained fairly small. 2016 was the first time the company ranked on Entrepreneur’s Franchise 500 list. Black Bear Diner earned spot No. 336 on last year’s list. The restaurant ranked again on Entrepreneur’s list for 2017 and landed at spot No. 296.
Section II – Estimated Costs
- Please click here for detailed estimates of Black Bear Diner franchise costs, based on Item 7 of the company’s 2016 FDD (updated).