What are the on-site management requirements for a Lees Famous Recipe restaurant?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
If at any time you (if you are an individual), or the Operating Principal (if you are an entity) is not managing the Restaurant, we may immediately appoint a manager to maintain Restaurant operations on your behalf. Our appointment of a manager of the Restaurant does not relieve you of your obligations or constitute a waiver of our right to terminate the Franchise under Section 15 below. We are not liable for any debts, losses, costs or expenses you incur in operating the Restaurant or to any of your creditors for any Products, materials, supplies or services purchased by the Restaurant while it is managed by our appointed manager. We may charge you a management fee equal to three percent (3%) of your Gross Sales for the period in which we appoint a manager and require you to reimburse us for our costs and expenses in providing such services. We may cease to provide such management services at any time.
Source: Item 22 — CONTRACTS (FDD pages 69–70)
What This Means (2025 FDD)
According to the 2025 Lees Famous Recipe Franchise Disclosure Document, the franchise agreement stipulates that if the franchisee (if an individual) or the Operating Principal (if the franchisee is an entity) does not manage the Restaurant, Lees Famous Recipe has the right to appoint a manager to oversee operations on the franchisee's behalf. This appointment does not relieve the franchisee of their obligations under the franchise agreement, nor does it waive Lees Famous Recipe's right to terminate the franchise agreement.
The franchisee is responsible for any debts, losses, costs, or expenses incurred during the period when the appointed manager is in place and is also responsible for payments for products, materials, supplies, or services purchased during this time. Lees Famous Recipe may charge a management fee equal to three percent (3%) of the restaurant's Gross Sales during the period they provide a manager, and the franchisee must reimburse Lees Famous Recipe for all costs and expenses related to these management services. Lees Famous Recipe can discontinue these management services at any time.
This clause protects Lees Famous Recipe's interests by ensuring continuous operation and adherence to brand standards even if the franchisee is unable to manage the restaurant directly. However, it also places a financial burden on the franchisee, who must cover the management fees and associated costs while still remaining responsible for the restaurant's financial obligations. Prospective franchisees should consider this potential cost and ensure they have a plan for consistent on-site management to avoid incurring these additional expenses.