Does a Lees Famous Recipe Area Development Agreement grant an exclusive territory?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
If you are in full compliance with your Area Development Agreement and any existing Franchise Agreement you have entered into with us, then we will grant you the right to open the number of Restaurants you agreed to open as part of your Development Schedule within your Development Area, and, except as otherwise provided below, we will not establish, nor license anyone other than you to establish, a Restaurant in the Development Area during the term of the Development Agreement. Due to our reservation of rights described below, the territorial protection of the Development Area is limited. Therefore, you will not receive an exclusive territory. You may face competition from other franchisees, from other outlets that we own, or from other channels of distributions or competitive brands that we control.
Source: Item 12 — TERRITORY (FDD pages 47–50)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, an Area Development Agreement does not grant an exclusive territory. While Lees Famous Recipe will define a Development Area where the developer has the right to locate and secure approved sites for their restaurants, the agreement explicitly states that the territorial protection is limited, and therefore, not exclusive.
The size of the Development Area depends on the demographics of the region the developer wishes to develop. As long as the developer is in full compliance with the Area Development Agreement and any existing Franchise Agreements, Lees Famous Recipe will grant them the right to open the number of restaurants agreed upon in the Development Schedule within their Development Area. However, Lees Famous Recipe reserves the right to establish, or license others to establish, a restaurant in the Development Area during the term of the Development Agreement.
This lack of exclusivity means that a Lees Famous Recipe developer may face competition from other franchisees, outlets owned by Lees Famous Recipe, other distribution channels, or competitive brands controlled by Lees Famous Recipe. If the developer fails to comply with the Development Schedule or materially defaults under the Area Development Agreement, Lees Famous Recipe may terminate or modify the territorial rights, reduce the area of territorial rights, reduce the number of restaurants that the developer may develop, or terminate the Development Agreement.