What section of the Lees Famous Recipe Franchise Agreement addresses post-termination obligations?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
16. YOUR OBLIGATIONS UPON TERMINATION OR EXPIRATION
- A. Post-Term Duties. If this Agreement expires or is terminated for any reason, you will:
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- immediately cease operation of the Restaurant and using the Marks as well as any confusingly similar trademarks or service marks;
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- within ten (10) days after termination, pay all amounts due and owing to us or our affiliates, including all Royalty Fees, Brand Cooperative Advertising Fund Fees, Local Advertising Expenditures (if applicable), Regional Marketing Cooperative Contributions (if applicable), Technology Fees and accrued interest due under this Agreement;
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- discontinue using, and return to us by priority United States mail with a tracking number, any hard copies of, the Operations Manual and any other manuals, advertising materials, and all other printed materials relating to the operation of the Franchised Business;
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- assign to us or, at our discretion, disconnect the telephone number for the Restaurant. You acknowledge that we have the sole right to and interest in all telephone numbers and directory listings associated with the Marks, and you authorize us, and appoint us as your attorney-in-fact, to direct the telephone company and all listing agencies to transfer such numbers and listings to us;
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- remove from the Restaurant premises all signs, posters, fixtures, decals, wall coverings and other materials that are distinctive of a Lee's Famous Recipe Restaurant or bear the name "Lee's Famous Recipe" or other Marks;
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- comply with all post-termination obligations under any software license agreement, including the return of all materials relating to the Proprietary Software;
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- take all necessary action to cancel all fictitious or assumed name or equivalent registrations relating to your use of any of the Marks;
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- immediately cease using Confidential Information (including all Customer Data) and return to us all documents in your possession that contain Confidential Information;
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- at our option, we will purchase your inventory of Products in good and saleable condition at your actual cost less a thirty percent (30%) stocking fee and you will return to us any other remaining Products at no cost to us; and
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- comply with all other applicable provisions of this Agreement, including the non-compete provisions.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 33–34)
What This Means (2025 FDD)
According to the 2025 Lees Famous Recipe Franchise Disclosure Document, Section 16 of the Franchise Agreement outlines the franchisee's obligations upon termination or expiration of the agreement. This section details several key duties that a franchisee must adhere to once the franchise agreement concludes, regardless of the reason for termination. These duties range from ceasing operations and use of Lees Famous Recipe's trademarks to fulfilling financial obligations and returning confidential information.
Specifically, Section 16A requires the franchisee to immediately stop operating the restaurant and discontinue using Lees Famous Recipe's marks. Within ten days of termination, all outstanding payments, including royalty fees, advertising fund fees, technology fees, and accrued interest, must be paid. The franchisee is also obligated to return all operational manuals, advertising materials, and other printed materials. Additionally, the franchisee must assign or disconnect the restaurant's telephone number, remove all distinctive signage and materials, and comply with software license agreements, including returning proprietary software.
Furthermore, the franchisee must cancel any assumed name registrations related to the use of Lees Famous Recipe's marks and cease using any confidential information, returning all related documents. At Lees Famous Recipe's option, the franchisor may purchase the franchisee's inventory of products in good condition at the franchisee's cost, less a 30% stocking fee. Finally, the franchisee must comply with all other applicable provisions of the agreement, including non-compete clauses. These post-termination obligations are designed to protect Lees Famous Recipe's brand and system, ensuring a smooth transition and preventing unfair competition from former franchisees.