Lee's Famous Recipe

The transfer fee of $17,500 is above the typical range for quick service restaurant franchises. What services and support are included in this transfer fee, and is it fully refundable if the transfer is denied?

Termination rate of 1.6% exceeds the typical range for this category. Can you provide details on the specific reasons for the 5 terminations over the past 3 years and whether they resulted from franchisor enforcement or franchisee violations?

The franchise agreement identifies 18 non-curable defaults allowing immediate termination. Can you provide a complete list of these 18 defaults and examples of how the franchisor has applied them in practice?

Gross sales figures for your system exceed typical ranges by approximately 10-13%. What factors contribute to this performance, and how representative are these figures across all unit types and locations?

The renewal term of 15 years is significantly longer than the typical 5-10 year range. What are the 7 conditions franchisees must satisfy to qualify for renewal, and have any franchisees been denied renewal?

All disputes must be litigated in the franchisor's home state, and jury trial and class action rights are waived. How many franchisees have been involved in disputes during the past 5 years, and what were the outcomes?

The franchise agreement requires personal guaranties from all principal owners and potentially spouses. Are there any circumstances under which the franchisor will agree to limit guaranties to the business entity only?

Technology fee of $100 monthly is below the typical range. Does this fee cover all required technology systems, or are additional technology costs charged separately by approved vendors?

Franchisees must purchase from approved suppliers and offer only franchisor-approved products. How many suppliers are currently approved, and what is the approval process and timeline for new products or suppliers?

The franchise agreement grants the franchisor authority to establish maximum menu prices. In what circumstances has the franchisor exercised this authority, and how has it impacted franchisee profitability?

Can you provide the complete Item 19 financial performance disclosure, including the number of units reporting, whether figures include or exclude outliers, and any material changes in operating costs over the past 3 years?

Unit count has fluctuated between 123-128 over 3 years. What is the franchisor's growth strategy and target for unit expansion, and what support is provided for new unit development?

Two units closed in 2023, which was higher than other years. Were these franchisor-initiated closures or voluntary exits by franchisees, and what were the contributing factors?

The non-compete clause is 2 years within 5 miles. Are there any exceptions to this restriction, such as selling to a franchisor-approved buyer or transferring to family members?

Renewal requires payment of a fee equal to the then-current franchise fee. If the franchise fee increases significantly at renewal time, would the higher renewal fee apply, and is there any cap on renewal fee increases?

Does the franchisor provide any training, remodeling support, or financial assistance for franchisees seeking renewal after 15 years, given the substantial long-term commitment?

What specific encroachment protections are in place given that territory is not exclusive? How does the franchisor define and enforce protected territory boundaries?

Have any franchisees requested or negotiated modifications to standard agreement terms, such as shorter initial terms, reduced renewal fees, or more lenient termination provisions?

What is the average unit economics for existing franchisees based on the Item 19 data (including COGS, labor, rent, and other major operating expenses), and how do these compare to industry benchmarks?