According to the Moes Southwest Grill FDD, what is the meaning of ARG?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
The following affiliates who offer franchises resolved actions brought against them with settlements that involved their becoming subject to currently effective injunctive or restrictive orders or decrees. None of these actions have any impact on us or our brand nor allege any unlawful conduct by us.
The People of the State of California v. Arby's Restaurant Group, Inc. (California Superior Court, Los Angeles County, Case No. 19STCV09397, filed March 19, 2019). On March 11, 2019, our affiliate, Arby's Restaurant Group, Inc. ("ARG"), entered into a settlement agreement with the states of California, Illinois, Iowa, Maryland, Massachusetts, Minnesota, New Jersey, New York, North Carolina, Oregon and Pennsylvania. The Attorneys General in these states sought information from ARG on its use of franchise agreement provisions prohibiting the franchisor and franchisees from soliciting or employing each other's employees. The states alleged that the use of these provisions violated the states' antitrust, unfair competition, unfair or deceptive acts or practices, consumer protection and other state laws. ARG expressly denies these conclusions but decided to enter into the settlement agreement to avoid litigation with the states. Under the settlement agreement, ARG paid no money but agreed (a) to remove the disputed provision from its franchise agreements (which it had already done); (b) not to enforce the disputed provision in existing agreements or to intervene in any action by the Attorneys General if a franchisee seeks to enforce the provision; (c) to seek amendments of the existing franchise agreements in the applicable states to remove the disputed provision from the agreements; and (d) to post a notice and ask franchisees to post a notice to employees about the disputed provision. The applicable states instituted actions in their courts to enforce the settlement agreement through Final Judgments and Orders, Assurances of Discontinuance, Assurances of Voluntary Compliance, and similar methods.
Source: Item 3 — Litigation (FDD pages 25–28)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill FDD, ARG refers to Arby's Restaurant Group, Inc., an affiliate of the franchisor. This definition appears in the context of a legal settlement involving Arby's and several state attorneys general. The states alleged that Arby's use of franchise agreement provisions prohibiting the solicitation or employment of each other's employees violated antitrust, unfair competition, and consumer protection laws. Arby's expressly denied these conclusions but entered into a settlement agreement to avoid litigation.
The settlement agreement required Arby's to remove the disputed provision from its franchise agreements, not enforce the provision in existing agreements, seek amendments to remove the provision from existing agreements in applicable states, and post a notice to employees about the disputed provision. While Moe's Southwest Grill franchisees are not directly impacted by this settlement, it is important to note that Moe's Southwest Grill is affiliated with other franchise brands, and actions taken by those brands could potentially reflect on the parent company.
Prospective Moe's Southwest Grill franchisees should be aware of the legal and business dealings of the franchisor and its affiliates, as these can provide insights into the overall stability and ethical practices of the organization. Although the FDD states that the actions of Arby's Restaurant Group, Inc. have no impact on the Moe's Southwest Grill brand, franchisees should still consider the broader implications of such legal matters.