How is the 'Development Area' for a Lees Famous Recipe franchise defined?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. "Development Area" means the geographic area, identified in Exhibit A to this Agreement, where we grant you the right to develop a certain number of Lee's Famous Recipe Restaurants.
(as depicted on the attached map) provided that the location of any Lee's Famous Recipe Restaurant in operation or under lease, construction, or other commitment to open in the Development Area as of the Effective Date, and, with respect to any such franchised Lee's Famous Recipe Restaurant, any protected area then granted by us under the applicable Lee's Famous Recipe franchise agreement, all or part of which is in the Development Area, are expressly excluded from the Development Area. Any political boundaries included in the description of the Development Area will be considered fixed as of the Effective Date and will not change notwithstanding a political reorganization or a change in those boundaries. Unless otherwise specified, all street boundaries will be deemed to end at the street center line unless otherwise specified.
[Insert Map of Development Area]
- B.
You also understand and agree that the Development Area does not include, and we reserve all franchise and development rights respecting any Non-Traditional Venues located within the geographic boundaries of the Development Area.
- C.
If you are in compliance with your obligations under this Agreement and all of the Franchise Agreements between you (including any affiliate of yours) and us, then we shall not establish, nor license anyone other than you to establish, a Restaurant in the Development Area until the earlier of (i) the termination or expiration of this Agreement, (ii) the opening of the last required Restaurant under the Development Schedule, or (iii) the last date specified in the Development Schedule, except as otherwise provided under Sections 1(D) below.
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 Lees Famous Recipe's 2025 Franchise Disclosure Document, the Development Area is defined as the geographic area, identified in Exhibit A of the Development Agreement, where Lees Famous Recipe grants the franchisee the right to develop a certain number of restaurants. The Development Area's boundaries are depicted on a map attached to the agreement. Any existing Lees Famous Recipe restaurants or protected areas already granted under previous franchise agreements within the Development Area are excluded. Political boundaries are fixed as of the agreement's effective date, and street boundaries typically end at the street's center line unless otherwise specified.
However, the Development Area does not include Non-Traditional Venues, and Lees Famous Recipe retains all franchise and development rights for these venues, even if they are located within the geographic boundaries of the Development Area. Lees Famous Recipe also retains the right to operate or grant others the right to operate restaurants outside the Development Area and to promote and sell products and services under different trademarks through various channels of distribution, including the internet and other retail outlets, both within and outside the Development Area.
If the franchisee is in compliance with their obligations under the Development Agreement and all Franchise Agreements, Lees Famous Recipe will not establish or license anyone else to establish a restaurant in the Development Area. This exclusivity lasts until the earliest of the termination or expiration of the agreement, the opening of the last required restaurant under the Development Schedule, or the last date specified in the Development Schedule. Upon expiration or termination of the Development Agreement, the franchisee must immediately cease developing new restaurants in the Development Area, and Lees Famous Recipe can grant others the right to establish and operate restaurants there.
Prospective franchisees should carefully review Exhibit A and the attached map to fully understand the geographic scope of their Development Area. They should also inquire about any existing restaurants or protected territories within the area that may affect their development plans. Understanding these rights and restrictions is crucial for planning and investment decisions.