Who bears the cost of participating in promotional campaigns for a Moes Southwest Grill franchise?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1 | Amount | Date Due | Remarks |
|---|---|---|---|
| than 1% of Net Sales on local market advertising. | See Item 11 for what will count towards meeting your obligation. If you fail to make the minimum advertising expenditures, we may do so on your behalf and you must reimburse us for our expenses. We may also elect to collect all or a portion of the Local Marketing Obligation from you and (i) contribute it to the Ad Fund, (ii) conduct national, regional, or local advertising, (iii) spend it on local advertising, or (iv) contribute it to your Advertising Cooperative. | ||
| Promotions and Advertising Materials | Up to 110% of our or our affiliates' actual costs and expenses related to the goods you purchase from us or them. | As incurred | You will participate at your own cost in temporary or permanent promotional campaigns that we establish (e.g., limited time offers, gift cards, coupons, loyalty programs, customer relationship management, and other supplemental marketing programs), which may be applicable to the System as a whole or to specific advertising market areas, and promotional programs your Advertising Cooperative establishes. We may require or permit you to purchase items from us or our affiliates necessary to participate in such campaigns, such as counter cards posters, banners, signs, photographs, loyalty program rewards, give-away items, and gift cards. |
Source: Item 6 — Other Fees (FDD pages 30–41)
What This Means (2025 FDD)
According to Moes Southwest Grill's 2025 Franchise Disclosure Document, franchisees are responsible for the costs associated with participating in promotional campaigns. These campaigns can be temporary or permanent and may include limited-time offers, gift cards, coupons, loyalty programs, and other marketing initiatives. These promotions may apply system-wide or to specific advertising market areas. Franchisees also bear the cost of promotional programs established by their local Advertising Cooperative.
Moes Southwest Grill may require franchisees to purchase items necessary for participation in these campaigns from the franchisor or its affiliates. These items can include counter cards, posters, banners, signs, photographs, loyalty program rewards, give-away items, and gift cards. The fees for these promotions and advertising materials can be up to 110% of the actual costs and expenses incurred by Moes Southwest Grill or its affiliates for the goods purchased by the franchisee.
This arrangement is typical in franchising, where franchisees often contribute to both national and local marketing efforts. It is important for prospective Moes Southwest Grill franchisees to factor in these ongoing promotional costs when assessing the overall investment and potential profitability of the franchise. Understanding the types and frequency of promotional campaigns will be crucial for budgeting and financial planning.