What is assumed about tenant improvement allowances in the high estimate for a Moes Southwest Grill location?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
ed with "ground-up" construction (e.g., exterior shell, site work, parking lots, and lighting). The low estimate assumes the developer will supply all sitework beginning five feet outside of the building's walls. The high estimate assumes you will be responsible for both constructing the building and performing the sitework.
You may be able to negotiate tenant improvement allowances from your landlord. The estimate is presented net of estimated tenant im
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 41–47)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the high estimate for the initial investment assumes that no tenant improvement allowance is available from the landlord. In contrast, the low estimate assumes a $72,000 tenant improvement allowance, which is based on the average reported by franchisees to Moe's Southwest Grill and its affiliates for similar units.
Tenant improvement allowances are financial incentives provided by landlords to tenants to help offset the costs of customizing a commercial space. The absence of this allowance in the high estimate means that a prospective Moe's Southwest Grill franchisee should be prepared to cover all construction and build-out costs themselves, potentially increasing the initial investment significantly. This is a crucial factor to consider when evaluating the financial feasibility of opening a franchise.
Understanding the availability of tenant improvement allowances is essential for accurate financial planning. Franchisees should actively negotiate with landlords to secure these allowances, as they can substantially reduce the upfront costs. The difference between the high and low estimates highlights the potential financial impact of these negotiations on the overall investment required to launch a Moe's Southwest Grill franchise.