What happens if a Lees Famous Recipe franchisee does not have a site when signing the Franchise Agreement?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
The location of the Restaurant and the Designated Territory will be identified in Exhibit A to the Franchise Agreement. If you do not have a site for your Restaurant when you sign the Franchise Agreement, you will sign Exhibit B to the Franchise Agreement and will have three months after the date of the Franchise Agreement to find a site for the Restaurant (acceptable to us) within the designated geographic area.
Once we approve a location within the geographic area established in Exhibit B to the Franchise Agreement, we and you will then sign Exhibit A (which identifies the Designated
Territory for your Restaurant). Maintenance of your Designated Territory is not dependent upon achieving certain sales volumes, market penetration or other contingency. Your Designated Territory will not be altered during the initial term of your Franchise Agreement, although it may be altered upon renewal of your franchise.
Source: Item 12 — TERRITORY (FDD pages 47–50)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, if a franchisee does not have a restaurant site selected when signing the Franchise Agreement, they will sign Exhibit B to the agreement. This exhibit likely outlines the designated geographic area where the franchisee is approved to search for a location. The franchisee then has three months from the date of the Franchise Agreement to find a site that Lees Famous Recipe finds acceptable within that designated geographic area.
Once Lees Famous Recipe approves a location, both parties will sign Exhibit A to the Franchise Agreement. Exhibit A identifies the Designated Territory for the restaurant. The maintenance of the Designated Territory is not dependent upon achieving certain sales volumes, market penetration, or other contingency. The franchisee's Designated Territory will not be altered during the initial term of the Franchise Agreement, although it may be altered upon renewal of the franchise.
This arrangement provides a prospective Lees Famous Recipe franchisee with a limited time frame to secure an approved location after committing to the franchise. The three-month window could present a challenge in competitive real estate markets or if Lees Famous Recipe's site approval criteria are particularly stringent. Franchisees should carefully consider their ability to identify and secure a suitable site within this timeframe, and understand the implications if they fail to do so.