What constitutes a 'Competing Business' to a Lees Famous Recipe Restaurant?

According to Lees Famous Recipe's 2025 Franchise Disclosure Document, a 'Competing Business' is defined as any business similar to a Lees Famous Recipe Restaurant. This definition includes any restaurant that offers chicken and biscuits, items similar to Lees Famous Recipe's products, or any other business that could be perceived as confusingly similar to a Lees Famous Recipe Restaurant.

This definition is important because it is tied to the post-term covenant not to compete. Franchisees and their principal owners are restricted from engaging in or being associated with any Competing Business during the term of the franchise agreement and for a period of two years after the agreement expires or is terminated. This restriction applies within the franchisee's Development Area, within a five-mile radius of the Development Area, and within a five-mile radius of any other existing Lees Famous Recipe Restaurant.

However, there are exceptions to this restriction. Franchisees are allowed to operate other Lees Famous Recipe Restaurants under effective franchise agreements. Additionally, the ownership of securities listed on a stock exchange or traded on the over-the-counter market, representing one percent or less of that class of securities, is also permitted. This definition ensures that franchisees are aware of the scope of activities they are restricted from pursuing, to protect Lees Famous Recipe's market position and brand integrity.