What is the developer's obligation regarding the opening and operating of each Lees Famous Recipe Restaurant?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
Subject to the terms and conditions set forth herein, we grant you the right, and Developer undertakes the obligation, to develop and establish the number of Restaurants set forth in the Development Area, provided you open and commence operations of such Restaurants in strict accordance with the Development Schedule.
For each Restaurant to be developed hereunder, you will submit to us such site approval forms and data that we may specify, which may include a copy of the site plan, financial information, and such other information or materials as we may reasonably require, together with an option contract, letter of intent, term sheet, or other evidence satisfactory to us which describes your favorable prospects for obtaining such site, pursuant to and in accordance with the terms of the applicable Franchise Agreement.
You hereby acknowledge that adherence to the terms of this Agreement, including our Operations Manual and other System standards and specifications, are essential to the operation of all Lee's Famous Recipe Restaurants and the System as a whole.
You further acknowledge that time is of the essence in all actions required under this Agreement.
Prior to the opening date of the first Restaurant developed hereunder, you must hire and train a managing director (the "Managing Director") who will be subject to our approval, which approval will be given in our reasonable discretion. The Managing Director must devote his or her full time and efforts to the management and/or supervision of Restaurants within the Development Area.
Additionally, if you fail to comply with the Development Schedule, or otherwise materially default under this Agreement, then we may (in addition to our other remedies available to us under this Agreement, the Franchise Agreement(s), and applicable law) terminate or modify your territorial rights in or to the Development Area, reduce or modify the size of the Development Area, or reduce the number of Restaurants that you are granted the right to develop under this Agreement.
Our consent of a site does not constitute an assurance, representation, or warranty of any kind, express or implied, as to the suitability of the site for the Restaurant or for any other purpose.
We will not be responsible for the failure of a site that we approved to meet your expectations as to revenue or operational criteria.
You further acknowledge and agree that your acceptance of a franchise for the operation of a Restaurant at a site is based on your own independent investigation of the suitability of the site.
Source: Item 23 — RECEIPTS (FDD pages 70–287)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, a developer undertakes the obligation to develop and establish the number of Restaurants set forth in the Development Area, provided they open and commence operations of such Restaurants in strict accordance with the Development Schedule. The developer must submit site approval forms and data, including a copy of the site plan, financial information, and an option contract, letter of intent, term sheet, or other evidence satisfactory to Lees Famous Recipe which describes the developer's favorable prospects for obtaining such site, pursuant to and in accordance with the terms of the applicable Franchise Agreement.
The 2025 FDD states that adherence to the terms of the Development Agreement, including Lees Famous Recipe's Operations Manual and other System standards and specifications, are essential to the operation of all Lees Famous Recipe Restaurants and the System as a whole. Time is of the essence in all actions required under the Development Agreement. Prior to the opening date of the first Restaurant developed, the developer must hire and train a managing director who will be subject to Lees Famous Recipe's approval, which approval will be given in their reasonable discretion. The Managing Director must devote his or her full time and efforts to the management and/or supervision of Restaurants within the Development Area.
If the developer fails to comply with the Development Schedule, or otherwise materially defaults under the Development Agreement, Lees Famous Recipe may terminate or modify the developer's territorial rights in or to the Development Area, reduce or modify the size of the Development Area, or reduce the number of Restaurants that the developer is granted the right to develop under the Development Agreement. The consent of a site does not constitute an assurance, representation, or warranty of any kind, express or implied, as to the suitability of the site for the Restaurant or for any other purpose. Lees Famous Recipe will not be responsible for the failure of a site that they approved to meet the developer's expectations as to revenue or operational criteria. The developer's acceptance of a franchise for the operation of a Restaurant at a site is based on their own independent investigation of the suitability of the site.
These stipulations highlight the importance of adhering to the development schedule and operational standards set by Lees Famous Recipe. Prospective developers should carefully review the Development Agreement and Development Schedule, assess their financial capabilities, and conduct thorough due diligence on potential sites to ensure they can meet their obligations and the franchisor's expectations. The risk of losing territorial rights or facing other penalties for non-compliance underscores the need for a well-planned and executed development strategy.