Lee's Famous Recipe® Franchise
Cost, fees, owner earnings, closure rate and litigation for a Lee's Famous Recipe® franchise — pulled from the franchisor's own public FDD (2026), not its sales material.
Disclosure honesty
Lee's Famous Recipe® discloses earnings (Item 19) — but the grade is how honestly. We graded it B.
What their own earnings claim actually says
2025 affiliate-owned location data: average gross sales $2.13M, 4-Wall EBITDAR $365K (17.1%). Top third averaged $2.81M sales, $584K EBITDAR. Only 40% met average performance.
What a Lee's Famous Recipe® franchise actually costs to run
| Fee | Disclosed | Where it comes from |
|---|---|---|
| Initial franchise fee | $35,000 | Item 5 — paid up front, before you open |
| Royalty | 5% of gross sales | Item 6 — charged on revenue, not profit |
| Advertising fund | 3% of gross sales | Item 6 — brand marketing, spent at the franchisor's discretion |
| Total recurring fees | 8% of gross sales | Before rent, labor, food or debt service |
| Total initial investment | $1,340,600 – $2,564,000 | Item 7 — franchisor's own low/high estimate |
5% royalty, 3% brand ad fund, up to 1% local advertising required. Technology fee $100/month. Early termination fee: 24x average monthly royalty+ad fees.
Royalty and ad-fund percentages are charged on gross sales — an owner pays them whether or not the location is profitable.
Lee's Famous Recipe® system size and owner turnover
| Total outlets | 127 |
| Ceased operations | 1 |
| Terminated by franchisor | 0 |
| Transferred to new owners | 1 |
| Closure rate | 0.8% of outlets |
Franchised outlets declined 13 units (2024), 1 unit (2025); reacquisitions indicate company buybacks.
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 Famous Recipe® worth it? — how it compares to 164 similar franchises
| Ongoing fees | 8% of sales | lower than most (median 8%) |
| Startup cost | from $1,340,600 | pricier than 88% of peers |
| Disclosure honesty | Grade B | more honest than 85% of quick service restaurants franchises |
| Closure rate | 0.8% of outlets | better than most (median 1.3%) |
| Disclosed lawsuits | 0 | fewer than most |
Benchmarked against every quick service restaurants franchise we've graded from public FDDs — the context the franchisor's pitch never gives you.
Owner take-home for a Lee's Famous Recipe®
The franchisor's framing: 2025 affiliate-owned location data: average gross sales $2.13M, 4-Wall EBITDAR $365K (17.1… 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 Famous Recipe® franchise — frequently asked
- How much does a Lee's Famous Recipe® franchise cost?
- The FDD lists a total initial investment of about $1,340,600–$2,564,000, including a $35,000 initial franchise fee.
- How much do Lee's Famous Recipe® franchise owners make?
- 2025 affiliate-owned location data: average gross sales $2.13M, 4-Wall EBITDAR $365K (17.1%). Top third averaged $2.81M sales, $584K EBITDAR. Only 40% met average performance. We grade this disclosure B for honesty.
- What are the Lee's Famous Recipe® franchise fees?
- Lee's Famous Recipe®'s FDD discloses a $35,000 initial franchise fee, a 5% royalty on gross sales, a 3% advertising-fund contribution, for roughly 8% of gross sales in recurring fees before rent, labor, or debt service. 5% royalty, 3% brand ad fund, up to 1% local advertising required. Technology fee $100/month. Early termination fee: 24x average monthly royalty+ad fees.
- What is the Lee's Famous Recipe® franchise profit margin?
- Lee's Famous Recipe® does not publish a franchisee net-profit margin — almost no franchisor does. What Item 19 actually shows: 2025 affiliate-owned location data: average gross sales $2.13M, 4-Wall EBITDAR $365K (17.1%). Top third averaged $2.81M sales, $584K EBITDAR. Only 40% met average performance. Recurring fees alone take about 8% of gross sales, before rent, labor, food or debt service. Margin has to be reconstructed from the disclosure, not read off it.
- What is the Lee's Famous Recipe® franchise failure rate?
- Franchised outlets declined 13 units (2024), 1 unit (2025); reacquisitions indicate company buybacks.
- How many Lee's Famous Recipe® locations are there?
- Lee's Famous Recipe®'s FDD reports 127 total outlets, with 1 that ceased operations in the most recent reporting year and 1 transferred to new owners. Item 20 is where system health shows up before the marketing does.
- Does Lee's Famous Recipe® have complaints or lawsuits?
- Lee's Famous Recipe® discloses no material litigation in Item 3 of the filing we reviewed. That's a positive signal, though it covers only what the franchisor is required to report.
- Is a Lee's Famous Recipe® franchise worth it?
- It depends on the numbers, not the pitch. Lee's Famous Recipe® scores B on disclosure honesty, carries about 8% of sales in ongoing fees. Get the real owner take-home before you sign.
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Source: WI DFI Franchise Registration (2026). FranchiseValidate is independent and not affiliated with Lee's Famous Recipe® or its franchisor. Figures are extracted from the franchisor's own public disclosure document; verify against the current FDD before any decision.