What is the developer's obligation regarding the terms of the Lees Famous Recipe Area Development Agreement?
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.
You recognize the benefits from receiving the right to operate a Lee's Famous Recipe Restaurant utilizing the System and desire to: (i) become a multi-unit operator subject to the terms of this Agreement; and (ii) receive the benefits provided by us under this 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.
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.
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.
Upon expiration or termination of this Agreement for any reason, you must immediately cease to develop new Restaurants in the Development Area and we will be entitled to grant others the right to establish and operate Lee's Famous Recipe Restaurants in the Development Area.
Source: Item 23 — RECEIPTS (FDD pages 70–287)
What This Means (2025 FDD)
According to the 2025 Lees Famous Recipe FDD, a developer undertakes the obligation to develop and establish the number of restaurants set forth in the Development Area. This is under the condition that the developer opens and commences operations of such restaurants in strict accordance with the Development Schedule. The developer recognizes the benefits of operating a Lees Famous Recipe Restaurant utilizing the System and desires to become a multi-unit operator subject to the terms of the Development Agreement, receiving the benefits provided by Lees Famous Recipe.
The FDD specifies that adherence to the terms of the Development Agreement, including the 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. The developer must submit site approval forms and data, including a copy of the site plan, financial information, and other materials, along with evidence of favorable prospects for obtaining the site, pursuant to the applicable Franchise Agreement.
If the developer fails to comply with the Development Schedule or materially defaults under the Development Agreement, Lees Famous Recipe may terminate or modify the developer's territorial rights, reduce or modify the size of the Development Area, or reduce the number of Restaurants the developer is granted the right to develop. Upon expiration or termination of the Development Agreement, the developer must immediately cease developing new Restaurants in the Development Area, and Lees Famous Recipe will be entitled to grant others the right to establish and operate Lees Famous Recipe Restaurants in the Development Area.