How often must a Lees Famous Recipe franchisee provide documentation of Local Advertising Expenditures?

According to the 2025 Lees Famous Recipe Franchise Disclosure Document, franchisees must provide documentation of their Local Advertising Expenditures each quarter, if requested by Lees Famous Recipe. Lees Famous Recipe recommends that franchisees spend at least 1% of Gross Sales weekly on local market advertising. However, Lees Famous Recipe retains the right to require franchisees to spend up to 1% of Gross Sales each week on approved local marketing, excluding on-site signs, telephone directory listings, and costs of Products sold at a reduced cost or given away.

If Lees Famous Recipe requires a franchisee to pay the Local Advertising Expenditures, these payments are due on the Payment Date. Alternatively, Lees Famous Recipe can require the franchisee to pay that amount to them, and Lees Famous Recipe will then spend it on local market advertising on the franchisee's behalf, using their sole discretion.

It is important to note that in 2008, Lees Famous Recipe entered into license agreements with LFR Licensees, which do not require them to make local advertising expenditures. As of December 31, 2024, there were 71 LFR Licensees who are not required to make these local advertising expenditures. This highlights that the advertising requirements can vary based on the specific agreement a franchisee has with Lees Famous Recipe.