Can the Ad Fund be used for shopper programs at Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
We may use the Ad Fund to meet the costs of administering, preparing, and conducting national, local, or regional advertising, promotional, or brand building programs of any kind, including the cost of (i) preparing and conducting television, radio, magazine, newspaper, and digital advertising campaigns and other public relations activities (including, but not limited to, for purposes of brand reputation management), (ii) employing public relations firms and advertising agencies to assist in these activities, and (iii) conducting other activities that are directly or indirectly designed to promote the System, its franchisees, and/or increase System sales, such as limited-time menu offerings, crew incentives, franchisee incentive and/or promotional programs, customized materials (e.g., cups), up-sell programs, guest response programs, manager/employee recognition programs, quality assurance and food safety programs, mystery shop and shopper programs, brand websites and ordering platforms, brand applications, social media account administration and promotion, and in-store equipment and technologies related to such marketing programs. We may use the Ad Fund to compensate us for the reasonable administrative costs and overhead we incur in activities related to advertising and promotional programs, including new product development; market research; preparing advertising and promotional materials; Digital Marketing (as defined below); working with public relations firms, advertising agencies, advertising placement services, and creative talent; reimbursing franchisee advisory council meeting expenses; developing and maintaining, and paying third parties for the development and maintenance of, internet sites, applications, and other equipment and technologies related to marketing programs.
Source: Item 11 — Franchisor's Assistance, Advertising, Computer Systems, and Training (FDD pages 53–68)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the Ad Fund can be used for shopper programs. Specifically, the Ad Fund may cover the costs of various advertising, promotional, and brand-building initiatives. These initiatives include traditional advertising campaigns (television, radio, etc.) and activities designed to promote the Moes Southwest Grill system, its franchisees, and increase sales.
The FDD specifies that the Ad Fund can be used for 'mystery shop and shopper programs.' This means that Moes Southwest Grill has the discretion to allocate funds towards programs that evaluate customer experience and service quality through mystery shoppers. These programs are designed to provide feedback and insights that can improve operations and customer satisfaction.
For a prospective franchisee, this indicates that a portion of their mandatory advertising contributions (currently 3% of Net Sales, and potentially up to 4%) could be used to fund shopper programs. While Moes Southwest Grill has sole authority over the Ad Fund's usage, the inclusion of shopper programs as an approved use suggests a commitment to monitoring and improving customer service standards across the franchise system. Franchisees should be aware that Moes Southwest Grill is not obligated to spend Ad Fund monies in proportion to their contributions or to ensure direct benefits to their specific location.