Are the fees paid to Lees Famous Recipe or its affiliates refundable?

According to the 2025 Lees Famous Recipe Franchise Disclosure Document, fees and charges paid to Lees Famous Recipe or its affiliates are non-refundable. However, the refundability of fees and charges imposed by third parties will depend on the negotiations and agreements the franchisee makes with those third parties. This means that while the initial franchise fee and other payments made directly to Lees Famous Recipe are not recoverable, a prospective franchisee may be able to negotiate refund terms with vendors or landlords.

This policy has significant implications for potential franchisees. Given that the initial investment for a Lees Famous Recipe restaurant can range from $498,100 to $1,706,900 for a traditional stand-alone location with a new structure, understanding which portions of this investment are non-refundable is crucial. The non-refundable nature of fees paid directly to Lees Famous Recipe underscores the importance of thorough due diligence before signing any agreements or making payments.

In the franchise industry, it is common for initial franchise fees to be non-refundable, as these fees compensate the franchisor for the initial costs of granting the franchise and providing initial training and support. However, franchisees should carefully review all agreements with third-party vendors and landlords to understand their refund policies, especially concerning potentially large expenditures like site work or building improvements. For example, the FDD notes that site work for a traditional stand-alone location can range from $100,000 to $500,000, and building improvements can range from $800,000 to $1,200,000. Negotiating favorable refund terms with these third parties can mitigate financial risk.

Therefore, prospective Lees Famous Recipe franchisees should prioritize understanding the refund policies associated with each aspect of their initial investment. While fees paid to Lees Famous Recipe are non-refundable, there may be opportunities to negotiate refund options with third-party vendors and landlords, which could provide a measure of financial protection.