Lee's Famous Recipe Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$517,200 - $2,353,900
Franchise Fee
$35,000
Total US Locations
126
Business Summary
Lee's Famous Recipe operates quick-service restaurants that specialize in chicken, biscuits, and other complementary food items. These restaurants can be traditional stand-alone buildings with drive-throughs and seating, streamlined locations within strip centers, or non-traditional spots inside other establishments like convenience stores or airports. Lee's Famous Recipe franchisees use a comprehensive system that covers everything from site selection and equipment to marketing and training, all under the Lee's Famous Recipe brand and proprietary recipes.
Corporate History
The Lee's Famous Recipe brand has a history dating back to October 2003 when Lee's Famous Recipes, Inc. (LFR Inc.) began operations and first offered franchises. After a period of not offering franchises from 2005-2008, LFR Inc. transitioned to offering licenses for Lee's Famous Recipe Chicken restaurants in 2008. Famous Recipe Group, LLC (FRG) later began offering Lee's Famous Recipe franchises in January 2014. The current franchisor, Lee's Franchisor LLC, was formed in May 2021, began its own operations in June 2021, and acquired the franchise assets for the Lee's Famous Recipe system from FRG in June 2021. Lee's Franchisor LLC then began offering franchises in November 2021.
Financial Overview
Investment Range
$517,200 - $2,353,900
Franchise Fee (Low)
$35,000
Franchise Fee (High)
$35,000
Royalty %
5%
Marketing %
3%
Equipment Costs (Low)
$413,700
Equipment Costs (High)
$2,129,900
Working Capital
$35,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The auditors have given Artemis Restaurant Corp., the parent company of Lee's Franchisor LLC, an unqualified opinion on its financial statements for 2022, 2023, and 2024, indicating they are presented fairly. There are no major concerns about its ability to continue operations. However, the company holds a significant amount of cash, $6,395,143 at the end of 2024, that exceeds insured limits at financial institutions, posing a credit risk. Additionally, Lee's Famous Recipe has a contingent liability of $1,275,000 for an acquisition that is estimated to be paid to Famous Recipe Group if certain criteria are met. The company also has concentration risks with its vendors and customers: 88% of its materials were purchased from two major vendors in 2024, and 37% of total accounts payable were due to one vendor. Furthermore, 72% of its total accounts receivable were due from two customers at year-end 2024.
Financing Details
Lee's Famous Recipe does not provide any direct or indirect financing to its franchisees. It also does not guarantee any loans, leases, or other financial obligations for its franchisees.
Performance Metrics
Total US Locations
126
Franchised Units
22
Corporate Units
33
Avg Square Footage
2,300
Franchising Since
2003
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Lee's Famous Recipe has no litigation to disclose in this FDD document.
Bankruptcy History
Lee's Famous Recipe has no bankruptcy history to disclose in this FDD document.
Agreement Terms
Initial Term
15 years
Renewal Term
15 years
Renewal Conditions
To renew, Lee's Famous Recipe franchisees must give advance notice, not have been in default in the 24 months before the current agreement expires, and must continue to follow all terms of their current franchise agreement. They also need to complete any required new or refresher training, sign the franchisor's then-current franchise agreement (which might have different terms), remodel their restaurant to meet current brand standards, prove they have the right to keep their restaurant location, pay a renewal fee, and sign a general release of claims.
Training & Support Program
Franchisor Assistance
Lee's Famous Recipe offers extensive support to its franchisees. Before opening, the franchisor helps designate a territory and approves proposed locations, leases, and financing. They provide prototype architectural plans for traditional stand-alone restaurants, approve the architect, and grant the right to use the Lee's Famous Recipe brand marks. Franchisees also receive access to the confidential Operations Manual and the designated Computer System, including the POS system. Initial training is a six-to-eight-week program for the franchisee or Operating Principal and at least three managers, with on-site opening assistance from two trainers for up to 10 days. On an ongoing basis, Lee's Famous Recipe administers a Brand Cooperative Advertising Fund, provides advisory services on operations and marketing, offers supplemental training (up to seven days annually), updates the Operations Manual, and conducts regular inspections and audits. Additionally, franchisees get access to the company's website and intranet system.
Initial Training Hours
282
Training Location
Designated training restaurant
Ongoing Support
Lee's Famous Recipe provides ongoing support through its Brand Cooperative Advertising Fund, which handles advertising and marketing materials. Franchisees may also receive supplemental and refresher training for up to seven days annually and are required to attend annual or regional conferences. The franchisor offers advisory services for restaurant operations, including guidance on products, marketing, and administrative procedures, and regularly updates the Operations Manual. Lee's Famous Recipe also has the right to set maximum prices for menu items and conducts periodic inspections and audits of restaurants and products. Additionally, franchisees get access to the company's website and intranet system.
Franchise Requirements
Ideal Candidate Profile
Lee's Famous Recipe seeks franchisees who, if sole proprietors, will directly operate their restaurant. For entities, a designated Operating Principal must oversee the restaurant full-time, hold at least a 5% ownership or profit interest, reside within a reasonable driving distance of the restaurant, and not engage in other substantial management activities. For Area Development agreements, a Managing Director must be hired and trained, subject to franchisor approval, and dedicate full-time efforts to managing or supervising restaurants within the development area.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
Retail
Owner Participation
Full-Time
Territory Type
Non-Exclusive
Staff Count
28
Territory Size Requirements
Lee's Famous Recipe defines territories for its franchisees using a mile-radius or other boundaries determined by the franchisor. The size is based on factors like restaurant type, population density, zip codes, counties, median household income, and economic development. For Traditional Stand-alone and Streamlined locations, the territory is typically a circle with a zero to one-mile radius centered on the restaurant. For Non-Traditional locations, the territory is determined based on anticipated customer counts and may be limited to the specific non-traditional site.
Staffing Notes
Lee's Famous Recipe restaurants typically require 10 to 45 employees, depending on the type of location (traditional, streamlined, or non-traditional). Each Lee's Famous Recipe restaurant must always employ at least one general manager and two assistant managers who have successfully completed the franchisor's training program.