What is the 'Commencement Date' defined as in the Moes Southwest Grill dispensing equipment lease?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Each piece of Equipment is leased commencing on its installation date (the "Commencement Date"). Customer may request the removal of any Equipment upon thirty (30) days prior written notice to Company. Removal of Equipment will not affect the term of any agreement between the parties. If this Lease is terminated with respect to any piece of Equipment for any reason prior to 100 months from the Commencement Date for that piece of Equipment, Customer will pay Company the actual cost of removal (including standard shipping and handling charges) and remanufacturing of that Equipment, as well as the unamortized portion of the costs of (i) installation and (ii) non-serialized parts (e.g., pumps, racks and regulators) and other ancillary equipment. Collectively, removal costs and items (i) and (ii) are referred to as "unbundling costs."
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, the Commencement Date for the dispensing equipment lease is defined as the installation date of each piece of equipment. This means that the lease term for each individual beverage dispenser, refrigeration unit, ice maker, or other leased equipment begins specifically on the day it is installed at the franchisee's location.
This definition is important because it triggers the start of the lease term and the associated financial obligations. If a franchisee chooses to remove a piece of equipment before 100 months from its Commencement Date, they may incur 'unbundling costs,' which include the cost of removal, shipping, handling, remanufacturing, installation, and non-serialized parts.
Prospective Moe's Southwest Grill franchisees should pay close attention to the installation dates of all leased equipment and factor in the potential unbundling costs if they anticipate needing to remove or replace equipment before the 100-month mark. Understanding this definition helps franchisees manage their costs and avoid unexpected expenses related to the dispensing equipment lease.