How is the 'Designated Territory' determined for a Lees Famous Recipe Restaurant?

According to Lees Famous Recipe's 2025 Franchise Disclosure Document, the "Designated Territory" is defined as the geographic area identified in each respective Franchise Agreement, surrounding the location of a Restaurant, as determined by Lees Famous Recipe. This means that the specific boundaries of a franchisee's protected area are not uniform but are decided on a case-by-case basis by the franchisor.

For a prospective franchisee, this implies that the extent of their exclusive operating area will depend on the terms negotiated in their individual Franchise Agreement. The size and shape of the territory could be influenced by factors such as population density, local competition, and other market conditions. The franchisee should carefully review and understand the designated territory outlined in their Franchise Agreement to assess the potential market and competitive landscape.

It is important to note that while a franchisee may have a designated territory, Lees Famous Recipe retains certain rights, including the right to operate or franchise other Lees Famous Recipe Restaurants at Non-Traditional Venues within the Development Area. They also retain the right to promote, sell, and distribute products and services authorized for sale at Lees Famous Recipe Restaurants under trademarks and service marks other than the Marks through similar or dissimilar channels of distribution. This means that the franchisee's exclusive rights may be limited, and they may face competition from other channels or venues operated by Lees Famous Recipe or its affiliates, even within their designated territory.

Therefore, a prospective franchisee should clarify the scope and limitations of the designated territory with Lees Famous Recipe before signing the Franchise Agreement. Understanding these terms is crucial for evaluating the potential profitability and competitive environment of the franchise.