What is the meaning of 'Designated Territory' in the context of a Lees Famous Recipe franchise?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
Before you open your Restaurant, we will satisfy the following obligations under the Franchise Agreement, or if appropriate the Area Development Agreement.
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- We will designate a territory for you to develop the Restaurant(s) (the "Designated Territory").
You must find an Authorized Location for your Lee's Famous Recipe Restaurant within the Designated Territory.
We grant each franchise for a specific location only.
We may require that the Authorized Location that you secure be leased directly to us or our affiliate under a form of lease satisfactory to us and subleased to you under the standard sublease then used by us for that purpose. (Franchise Agreement – Section 6)
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 34–47)
What This Means (2025 FDD)
According to the 2025 Lees Famous Recipe Franchise Disclosure Document, the 'Designated Territory' is the area that Lees Famous Recipe assigns to a franchisee for developing their restaurant(s). Before a franchisee can open a Lees Famous Recipe restaurant, they must find an authorized location within this Designated Territory.
The FDD specifies that Lees Famous Recipe grants franchises for specific locations only. The franchisee is responsible for finding a suitable site within their designated territory, and Lees Famous Recipe retains the right to approve or reject the proposed site based on factors like demographics, traffic, income levels, and housing costs. The franchisee must submit development materials for the proposed site, and Lees Famous Recipe will notify the franchisee in writing within 30 days whether the site meets their criteria.
If Lees Famous Recipe rejects the initial site, the franchisee must continue searching for an acceptable location within their designated territory. This process ensures that each Lees Famous Recipe restaurant is strategically placed, although Lees Famous Recipe does not guarantee the success of any particular location. The franchisor may also require the franchisee to lease the location to them, and then sublease it back to the franchisee.