B59/100FDD 2025
Lee’s Famous Recipe Chicken — Litigation & Risk
Food & Beverage - Quick Service · FDD Items 3, 4 & 5
Lower Risk
No litigation cases disclosed in FDD Items 3 and 4.
Source: FDD Items 3–5
FDD Items 3 & 4
Litigation Metrics
Cases disclosed
0
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
59 / 100
FranchiseVerdict composite
Rating
MODERATE
STRONG / MODERATE / CAUTION / AVOID
FDD Items 5, 6 & 17 — what you give up
Contract Risk Indicators
Mandatory arbitration
Not required
You retain the right to sue in court
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
2 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Delaware
State whose law governs disputes — relevant if you're not based there
What drove the 59/100 rating
Risk Score Breakdown
- 01MEDUnit count declined 12.3% YoY (126 units), indicating system contraction and potential franchisee struggles
- 02MINORNo protected territory means direct competition from other Lee's franchisees in your market
- 03MINORWide investment range ($517K-$2.35M) suggests inconsistent buildout costs and unclear capex requirements
- 04MINORHigh royalty burden (5% of gross sales) reduces net margins on already modest ~19% net profit margins
- 05MINORNo Item 19 (financial performance representations) provided—cannot validate if average revenue/income are achievable
- 06MINORUnprotected territory creates cannibalization risk, particularly concerning given system shrinkage
Severity inferred from FDD text — not a regulatory or legal classification
Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.