Ep 7. Imaginary Friend

Maxwell's youngest daughter, Grace, has created an imaginary friend, named Maggie. While Niles dismisses the new friend as a phase, Fran starts to make 'playdates' with Maggie and even talks to her as if she is real. When Maxwell unexpectedly walks in on one of these playdates, he expresses his concern to Fran about Grace's behavior and asks Fran to help Grace face reality. Fran agrees to do so, but Grace's heart breaks when she discovers that her friend is not real. As Fran comforts her, Niles reveals that he had an imaginary friend as a child that he still talks to, causing Fran and Maxwell to realize that maybe imaginary friends are not just a phase after all.