Is the company considered an employee or agent of the Moes Southwest Grill franchisee?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- n. Limited Recourse. The parties agree that any remedy or recourse available under or related to this Agreement is strictly limited to the parties to this Agreement. No past, present or future director, officer, employee, incorporator, member, partner, stockholder, subsidiary, affiliate, controlling party, entity under common control, ownership or management, vendor, service provider, agent or attorney of either party shall have any liability under this Agreement of or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby and thereby. The foregoing is not intended to discharge either party from its liability for any breach of this Agreement by its directors, officers, employees, consultants and agents.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
Based on the 2025 Moe's Southwest Grill Franchise Disclosure Document, the franchise agreement includes a clause addressing limited recourse. Specifically, it states that no agent of either party (franchisor or franchisee) shall have liability under the agreement. However, this does not discharge either party from liability for any breach of the agreement by its agents.
In practical terms, this means that while Moe's Southwest Grill's corporate entity aims to limit direct liability for its agents, franchisees may still have recourse against Moe's Southwest Grill itself if its agents cause a breach of the franchise agreement. Similarly, Moe's Southwest Grill can be held responsible for the actions of a franchisee's employees or agents if they violate the agreement.
Prospective franchisees should carefully review this section with legal counsel to fully understand the scope of liability and recourse under the franchise agreement. Understanding these limitations is crucial for managing risk and ensuring compliance with the terms of the franchise agreement.