Is violation of any material provision of the Lees Famous Recipe Franchise Agreement a cause for termination?
Lees_Famous_Recipe Franchise · 2025 FDDAnswer from 2025 FDD Document
| 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. |
| d. | Termination by franchisee | None | Not applicable. |
| e. | Termination by franchisor without cause | None | Not applicable. |
| f. | Termination by franchisor with | 15(A) through | We may terminate the Franchise Agreement only if |
| cause | (C) | you default. | |
| g. | "Cause" defined – curable defaults | 15(C) | Failure to conform to the material requirements of the System or the material standards as described in the Operations Manual or as we have established under the System; failure to timely pay any obligations or liabilities due and owing to us or our affiliates; violation of any material provision or obligation of the Franchise Agreement; and other breaches The cure period is generally 30 days |
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, violation of any material provision of the Franchise Agreement can be grounds for termination. Specifically, the FDD states that Lees Famous Recipe may terminate the Franchise Agreement if a franchisee commits a curable default, which includes the "violation of any material provision or obligation of the Franchise Agreement."
This means that if a Lees Famous Recipe franchisee violates a significant term or requirement outlined in their Franchise Agreement, Lees Famous Recipe has the right to terminate the agreement, provided the franchisee has an opportunity to cure the default. The cure period is generally 30 days. This is a fairly standard clause in franchise agreements, as it protects the franchisor's brand standards and system-wide consistency.
Prospective franchisees should carefully review the Franchise Agreement to understand what Lees Famous Recipe considers to be "material" provisions. Understanding these obligations is crucial, as failing to meet them, even unintentionally, could lead to the termination of the franchise and loss of the business. Franchisees should also note the distinction between curable and non-curable defaults, as non-curable defaults can lead to immediate termination without an opportunity to correct the issue.