Lee's Franchise
Cost, fees, owner earnings, closure rate and litigation for a Lee's franchise — pulled from the franchisor's own public FDD (2026), not its sales material.
Disclosure honesty
Lee's discloses little or no owner-earnings data (Item 19) — the franchisor won't put real profit in writing.
What their own earnings claim actually says
No financial performance representations disclosed. Franchisor explicitly states it does not make representations about franchisee financial performance or authorize such representations.
What a Lee's franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $50,000 | Item 5 — paid up front, before you open |
| Royalty | 6.9% of gross sales | Item 6 — charged on revenue, not profit |
| Advertising fund | 2% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 8.9% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $209,830 – $1,679,500 | Item 7 — franchisor's own low/high estimate |
6.9% royalty weekly; 2% local advertising monthly; optional 2% system marketing fund; transfer fee $5K–$15K.
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
Lee's system size and owner turnover
| Total outlets | 50 |
| Ceased operations | 4 |
| Terminated by franchisor | 0 |
| Transferred to new owners | 9 |
| Closure rate | 8.0% of outlets |
4 closures in 3 years; 9 transfers suggest turnover; modest net growth.
From Item 20 of the FDD 2026. Terminations and ceased operations are the franchisor's own count of owners who stopped — the number the sales pitch leaves out.
Is Lee's worth it? — how it compares to 22 similar franchises
| Ongoing fees | 8.9% of sales | about average |
| Startup cost | from $209,830 | cheaper than most (median $436,176) |
| Disclosure honesty | Grade F | less honest than most of the category |
| Closure rate | 8.0% of outlets | worse than 78% of peers |
| Disclosed lawsuits | 1 | fewer than most |
Benchmarked against every sandwich & sub shops franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a Lee's
The franchisor's framing: No financial performance representations disclosed. Franchisor explicitly states it does n… We reconstruct what an owner actually keeps, from their own FDD.
- Reconstructed owner P&L — net take-home after royalty, ad fund, rent, labor & debt
- Break-even timeline + cash-on-cash ROI
- Full fee stack + required-purchase markups
- Decoded real failure / closure rate
- How it ranks vs comparable franchises
- Validation-call playbook — the exact questions to ask
See a full sample report → · 30-day guarantee
Lee's franchise — frequently asked
- How much does a Lee's franchise cost?
- The FDD lists a total initial investment of about $209,830–$1,679,500, including a $50,000 initial franchise fee.
- How much do Lee's franchise owners make?
- Lee's discloses little or no earnings data (Item 19) — meaning the franchisor won't put real owner profit in writing. That's a red flag worth questioning.
- What are the Lee's franchise fees?
- Lee's FDD discloses a $50,000 initial franchise fee, a 6.9% royalty on gross sales, a 2% advertising-fund contribution, for roughly 8.9% of gross sales in recurring fees before rent, labor, or debt service. 6.9% royalty weekly; 2% local advertising monthly; optional 2% system marketing fund; transfer fee $5K–$15K.
- What is the Lee's franchise profit margin?
- Lee's discloses no Item 19 earnings representation, so no profit margin can be derived from the FDD at all. Any margin figure quoted elsewhere is an estimate, not a disclosure.
- What is the Lee's franchise failure rate?
- 4 closures in 3 years; 9 transfers suggest turnover; modest net growth.
- How many Lee's locations are there?
- Lee's FDD reports 50 total outlets, with 4 that ceased operations in the most recent reporting year and 9 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does Lee's have complaints or lawsuits?
- Lee's discloses 1 legal matter in Item 3 of its FDD. Item 3 covers the franchisor's litigation history, which is the closest thing to a public record of how it treats franchisees — read the case descriptions, not just the count.
- Is a Lee's franchise worth it?
- It depends on the numbers, not the pitch. Lee's scores F on disclosure honesty, carries about 8.9% of sales in ongoing fees, and discloses 1 legal matters. Get the real owner take-home before you sign.
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Compare Lee's to similar franchises
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Source: MN CARDS 36151-202604-08 (Clean FDD 2026). FranchiseValidate is independent and not affiliated with Lee's or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.