Is Lees Famous Recipe required to be the single source from which franchisees purchase the Computer System?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
s we disapprove, in addition to any separate remedies we may have, any amounts spent on those materials will not be credited toward your local marketing obligations described below.
Computer System
You must purchase the Computer System (as defined above in Item 8) which we have developed or selected for your Restaurant. We have the right to designate a single source from which you must purchase the Computer System and we or our affiliates may be that single source.
You must use any such Proprietary Software that we require, and the Proprietary Software will remain the confidential property of us or our third-party supplier. You must enter into our or our designee's standard form software license agreement in connection with your use of any Proprietary Software. We reserve the right to charge you an initial license fee related to your use of the Proprietary Software. You will pay the then-current fee (if any) for the Proprietary Software at or before the Proprietary Software is delivered to you. The Computer System may also include the use of various technology platforms, applications or services, which may include online ordering, third-party delivery services and other technology-based services as further described in the Operations Manual. You will pay the then-current fees associated with any technology platform we require to the designated third-party provider. (Franchise Agreement – Section 6(G))
You must pay us the Technology Fee described in Item 6 for Computer System support and periodic updates we or our designee provide to you respecting the Proprietary Software. As of the issuance date of this disclosure document, the Technology Fee is $100 per month. We may increase the Technology Fee upon 60 days' notice to you, but the monthly Technology Fee will not increase by more than 25% annually during the initial term of the Franchise Agreement. (Franchise Agreement – Section 4(F)) We reserve the right to assign our rights, title and interest in any Computer System and/or Proprietary Software to a third party we designate or to replace the Computer System and/or Proprietary Software. In such event, you may be required to enter into a separate software license agreement specified by the third-party supplier of the Computer System and/or Proprietary Software and pay any separate fees imposed under that agreement.
We require that you purchase or lease and use a POS System that has been approved in writing by us and meets our specifications and requirements. Currently, the only approved POS system is Focus POS. The POS system will manage the daily workflow of the business, coordinate the customer ordering experience, track inventory, food costs, labor, and other financial information, and have the capability to provide specific detailed information in both dollar amounts and percentages. Menu items and specific recipes must be able to be loaded into the system in order to obtain an "ideal usage" report along with an "actual usage" report and an "ideal food cost" report.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS, AND TRAINING (FDD pages 34–47)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, franchisees must purchase the Computer System that Lees Famous Recipe has developed or selected for their restaurant. Lees Famous Recipe retains the right to designate a single source from which franchisees must purchase the Computer System, and this single source may be Lees Famous Recipe or its affiliates.
Franchisees are also required to use any proprietary software that Lees Famous Recipe requires, with the software remaining the confidential property of Lees Famous Recipe or its third-party supplier. Franchisees must enter into a standard software license agreement and may be charged an initial license fee for using the proprietary software. The computer system may include various technology platforms, applications, or services, such as online ordering and third-party delivery services, for which franchisees will pay the current fees to the designated third-party provider.
The cost of purchasing the Computer System is estimated to be between $1,000 and $2,000, while the cost of the POS System is estimated to be between $30,000 and $40,000. Franchisees are currently required to purchase certain back-office software from an approved vendor, costing between $100 and $200 per unit per month, which includes software for inventory management and food cost management. While franchisees are not currently required to purchase other components of the computer system from an approved vendor, Lees Famous Recipe reserves the right to mandate this in the future. Franchisees also must pay a Technology Fee for Computer System support and updates, which is currently $100 per month and may increase by no more than 25% annually during the initial term of the Franchise Agreement.