Lees Famous Recipe
Lees Famous Recipe® offers quick-service restaurants featuring chicken and biscuits. Known for its Southern-style menu, it operates in the fast-food industry.
Lees Famous Recipe franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a single unit traditional stand-alone Lee's Famous Recipe ® franchise ranges from $1,340,600 to $2,353,900. For a reimaged structure, it is between $640,600 and $1,336,400. A streamlined franchise requires an investment of $572,500 to $1,126,400, while a non-traditional franchise costs between $517,200 and $825,800 [p.1].
What is the initial franchise fee?
The initial franchise fee for a single Lee's Famous Recipe Restaurant is $35,000 [p.14]. This fee is nonrefundable upon receipt [p.14] and applies uniformly to all franchisees [p.14].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is currently uniform at 5% for all Traditional Standalone, Streamlined, or Non-Traditional franchises. As of December 31, 2024, there are 71 LFR Licensees who do not pay royalties but instead pay an advertising royalty fee of 1% of Gross Sales to the affiliate, Lee's Advertising [p.18, p.62].
How long is the initial franchise agreement, and can I renew it?
The term length for the initial franchise agreement isn't specified in the excerpts. Additionally, the process and rights regarding renewal aren't detailed either. However, if you do not receive at least 6 months advance notice of the franchisor's intent not to renew your franchise or are prohibited from continuing to conduct substantially the same business under another trademark after expiration, then this section does not apply to your situation [p.6].
Can I sell or transfer my franchise, and what does that require?
You cannot voluntarily assign or transfer your franchise rights without the franchisor's prior written consent [p.79]. However, you can transfer all Restaurants owned and operated by you in connection with a sale of your business, provided it is done with the franchisor's prior written consent [p.79]. Additionally, Principal Owners as of the Effective Date may transfer their ownership interests among themselves without needing the franchisor's consent, but they must notify the franchisor within 30 days after such a transfer occurs [p.140].
On what grounds can the franchisor terminate the agreement?
According to [p.6], the franchisor can terminate the franchise agreement prior to expiration only for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and curing such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so.
What financial requirements — net worth and liquid capital — do I need to qualify?
You need to satisfy the Guarantor Net Worth Threshold, which is defined as the minimum net worth (total assets less total liabilities calculated according to U.S. generally accepted accounting principles) that you or a Guarantor must meet at all times during the term of the Agreement. This threshold can be periodically modified by the franchisor. Additionally, you are required to maintain reasonably adequate financial resources to meet the capital and operational expenses under the Agreement, considering current resources, projected cash flows, and financing assumptions [p.140]. The specific liquid capital requirements are not detailed in these excerpts; however, the franchisor reserves the right to require a minimum investment of capital as described on page 90.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory [p.48, p.50]. Your designated territory is limited, and you may face competition from other franchisees as well as non-traditional venues operated by the company within your Development Area [p.47, p.149]. This protection does not extend to Non-Traditional Venues where the company retains the right to operate or grant others such rights [p.48].
What training and ongoing support does the franchisor provide?
The franchisor provides initial on-the-job training along with manuals, workbooks, videos, and digital content [p.46]. Additionally, they have the right to require additional representatives to complete the training program before opening new restaurants [p.46]. The transferee must also ensure that at least one general manager and two assistant managers successfully complete the initial training program for any new or additional locations [p.104].
How many franchised outlets are there, and how many have closed or been terminated?
The FDD indicates that out of the 116 Lee's Famous Recipe locations included in Part II, one franchise location ceased operations in 2024. However, it does not specify the total number of franchised outlets or the exact number of those that have closed or been terminated as of December 29, 2024. [p.62]
Does the franchisor share any financial performance or earnings information?
Yes, the franchisor shares financial performance information. This includes average gross sales for new franchise locations that opened within the first six months of 2023 or 2024 [p.64], as well as historical average and median financial data from certain affiliate-owned and franchise/licensed owned locations for the fiscal year ending December 31, 2024 [p.59]. However, this information is limited to what is specified in Item 19 of the disclosure document, and any other financial performance projections must be substantiated upon reasonable request [p.65].
What am I restricted to selling, and where must I buy supplies?
You are restricted to offering and selling only those products and services that the franchisor has approved [p.54]. You may not sell Products or services authorized under the Franchise Agreement through any other means without prior approval, which includes not selling over the Internet or in Non-Traditional Venues [p.54]. Additionally, you must buy items from the franchisor or a limited group of suppliers designated by them, as these items might be more expensive than those available elsewhere [p.4].