Can the terms of a renewed Lees Famous Recipe franchise agreement differ from the original?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in franchise agreement | Summary | |
|---|---|---|---|
| a. | Length of the franchise term | 3 | Term is 15 years. |
| b. | Renewal or extension of the term | 3 | If you are in good standing, you may renew for an additional 15-year term. |
| Provision | Section in franchise agreement | Summary | |
| ---- | --------------------------------------------------- | -------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| c. | Requirements for franchisee to renew or extend | 3 | Provide advance notice, not be in default within the 24 months preceding the expiration of the initial term, comply with current Franchise Agreement, satisfactorily complete any new/refresher training programs, sign a new agreement (which may contain materially different terms and conditions than your original Franchise Agreement), remodel, provide proof you will maintain possession of the Restaurant premises and remodel the Restaurant as necessary to comply with our then-current standards and specifications, pay a renewal fee, and sign a general release of claims. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 54–59)
What This Means (2025 FDD)
According to Lees Famous Recipe's 2025 Franchise Disclosure Document, the terms of a renewed franchise agreement can indeed differ from the original agreement. Specifically, Item 17 outlines the requirements for renewal, stating that franchisees must "comply with current Franchise Agreement" and "sign a new agreement (which may contain materially different terms and conditions than your original Franchise Agreement)." This indicates that Lees Famous Recipe has the right to change the terms and conditions upon renewal.
For a prospective Lees Famous Recipe franchisee, this means that the terms they operate under during the initial 15-year term could change significantly if they choose to renew for an additional 15-year term. These changes could affect various aspects of the business, including fees, operational requirements, and brand standards. The franchisee must also satisfactorily complete any new or refresher training programs, remodel the restaurant to comply with then-current standards, and provide proof of maintaining possession of the restaurant premises.
It is common practice in the franchise industry for renewal agreements to reflect updated brand standards, market conditions, and legal requirements. However, the extent of these changes can vary. Lees Famous Recipe franchisees should carefully review the renewal agreement and seek legal counsel to understand the implications of any new terms and conditions. They should also factor in the costs associated with remodeling and training into their decision to renew the franchise agreement. Furthermore, franchisees must pay a renewal fee and sign a general release of claims, which means they waive any legal claims against Lees Famous Recipe upon renewal.