Are there any exceptions to Lees Famous Recipe's right of first refusal, and if so, what are they?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
D. Rights Reserved to us. We (for us and our affiliates) retain the right:
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- to directly operate, or to grant other persons the right to operate, Lee's Famous Recipe Restaurants at locations outside the Designated Territory;
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- to directly operate, or to grant other persons the right to operate, Lee's Famous Recipe Restaurants at Non-Traditional Venues within and outside the Designated Territory;
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- to promote, sell and distribute anywhere, including through restaurants and other establishments, the Products and the services authorized for sale at Lee's Famous Recipe Restaurants under trademarks and service marks other than the Marks through similar or dissimilar channels of distribution;
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- to promote, sell, distribute and license the Products and the services authorized for sale at Lee's Famous Recipe Restaurants, as well as similar products and services, other food products, beverages, clothing, glassware and memorabilia under the Marks through dissimilar channels of distribution (i.e., other than the operation of full-service Lee's Famous Recipe Restaurants), including direct mail, wholesale activities, grocery stores, convenience stores, retail
stores, and by electronic means such as the Internet, and other permanent, temporary, or seasonal food service facilities, carts, kiosks, or other mobile food vehicles, such as food trucks, and pursuant to conditions we deem appropriate within and outside the Designated Territory;
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- to acquire businesses that are the same as or similar to the Restaurant or other Lee's Famous Recipe Restaurants and operate such businesses regardless of whether such businesses are located within or outside the Designated Territory, and to be acquired by any third party which operates businesses that are the same as or similar to the Restaurant or other Lee's Famous Recipe Restaurants regardless of whether such businesses are located within or outside the Designated Territory; and
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- to promote the System and the Restaurants generally, including on the Internet (or any other existing or future form of one or more electronic commerce) and to create, operate, maintain and modify, or discontinue the use of websites using the Marks.
We (for us and our affiliates) further retain all other rights not explicitly granted to you under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 69–70)
What This Means (2025 FDD)
According to the 2025 Lees Famous Recipe FDD, Lees Famous Recipe retains several rights that could be considered exceptions to any perceived right of first refusal a franchisee might expect. Specifically, Lees Famous Recipe reserves the right to operate or franchise other Lees Famous Recipe Restaurants outside the franchisee's designated territory. They can also operate or franchise restaurants in Non-Traditional Venues both within and outside the designated territory. This means a franchisee's territory is not exclusive in these specific venues.
Furthermore, Lees Famous Recipe retains the right to sell products and services authorized for sale at Lees Famous Recipe Restaurants under different trademarks through various channels of distribution. This includes direct mail, wholesale, grocery stores, convenience stores, retail stores, and electronic means like the Internet. They can also license these products and services, along with similar items, through dissimilar channels of distribution, such as temporary food service facilities, carts, kiosks, or food trucks, within and outside the designated territory. This broad reservation of rights allows Lees Famous Recipe to explore alternative distribution methods without being restricted by a franchisee's territory.
Additionally, Lees Famous Recipe can acquire businesses similar to the Restaurant, regardless of location, and be acquired by any third party operating similar businesses, also regardless of location. They also retain the right to promote the System and Restaurants generally, including on the Internet, and to operate websites using the Marks. These retained rights emphasize that the franchisee's rights are limited to the specific Restaurant location and do not extend to preventing Lees Famous Recipe from pursuing other business opportunities, even if they might compete with the franchisee to some extent.