What is the developer's obligation regarding the use of the Marks and System for each Lees Famous Recipe Restaurant?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
We grant qualified third parties the right to develop a certain number of Lee's Famous Recipe Restaurants within a Development Area in accordance with the terms of this Agreement to which Developer must strictly adhere, with each Lee's Famous Recipe Restaurant within the Development Area being opened and operating utilizing the Marks and System pursuant to the terms and conditions set forth in our separate and then-current form of franchise agreement (each, a "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.
Source: Item 23 — RECEIPTS (FDD pages 70–287)
What This Means (2025 FDD)
According to the 2025 Lees Famous Recipe FDD, a developer is granted the right to develop a certain number of restaurants within a specific Development Area. However, this right is contingent upon the developer opening and operating these restaurants in strict accordance with a predetermined Development Schedule. The developer must ensure that each Lees Famous Recipe Restaurant within the Development Area operates utilizing the Marks and System as outlined in the then-current Franchise Agreement. This agreement is separate from the Area Development Agreement.
The FDD emphasizes that adherence to the terms of the Development Agreement, including the Operations Manual and other System standards and specifications, is essential for the operation of all Lees Famous Recipe Restaurants and the System as a whole. The developer acknowledges that the franchisor has developed a distinctive format and system for operating Lees Famous Recipe Restaurants, featuring specific food and beverage items prepared, stored, and served according to the System. This System includes the use of distinctive décor, products, equipment, supplies, confidential information, business techniques, methods, procedures, sales promotion programs, and the Marks.
The developer recognizes the benefits of operating a Lees Famous Recipe Restaurant using the System and acknowledges that the System and related materials contain proprietary and confidential information that makes the System unique. The developer also acknowledges that Lees Famous Recipe has established substantial goodwill and business value in its Marks, expertise, and System. Failure to comply with the Development Schedule or any other material default under the Development Agreement may result in the termination or modification of the developer's territorial rights, reduction of the Development Area, or a decrease in the number of restaurants the developer is authorized to develop.