Does Moes Southwest Grill or its affiliates derive revenue from franchisee purchases and leases?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
BACKGROUND:
- A. Moe's Franchisor SPV LLC ("Franchisor") and Franchisee are parties to that certain Franchise Agreement dated as of the Effective Date for the operation of the Franchised Business ("Franchise Agreement").
- B Franchisee is required to have a point of sale system ("POS System") for the Franchised Business that satisfies Franchisor's Minimum Specifications.
- C. Franchisee is required to obtain support for the POS System from an approved supplier, which may include Franchisor or its affiliates.
- D. Franchisee desires to obtain from Company, an affiliate of Franchisor, certain support for the POS System as detailed in this Agreement and Company agrees to provide such support under the terms and conditions set forth in this Agreement.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, it appears that Moe's Southwest Grill or its affiliates may derive revenue from franchisee purchases. Specifically, the document mentions that franchisees are required to have a point of sale system (POS System) that meets Moe's Southwest Grill's minimum specifications. Franchisees are also required to obtain support for the POS System from an approved supplier, which may include Moe's Southwest Grill or its affiliates.
The "POS System Support Services Agreement" indicates that an affiliate of Moe's Southwest Grill, referred to as "Company", may provide support services for the POS system. The agreement outlines the terms and conditions under which this support is provided. This suggests that Moe's Southwest Grill's affiliate could generate revenue by offering and providing these POS system support services to franchisees.
While the excerpts provided do not explicitly state that Moe's Southwest Grill or its affiliates receive revenue from leases, the requirement for franchisees to use approved suppliers, including the franchisor or its affiliates, for essential systems like the POS system, is a common practice in franchising. This arrangement allows the franchisor to maintain quality control and standardization across all franchise locations, while also creating a potential revenue stream for the franchisor or its affiliates.