What conditions must a Moes Southwest Grill franchisee meet to be granted a renewal term?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
A. Grant of Renewal Term. We may, in our reasonable discretion, grant you one additional 20-year term (the "Renewal Term," and collectively, with the Initial Term, the "Term"). To obtain the Renewal Term, (i) at all times during the Term, you must have substantially and timely complied with each provision of this Agreement and any other agreements between you and us, our affiliates, or your landlord and you must not have any defaults in existence as of the expiration of the Initial Term, and (ii) you must request, in writing, no earlier than 12 months, but no later than six months before the expiration of the Initial Term, that we grant you a Renewal Term. We will then provide you with an Application for a Renewal Term (an "Application"), which you must complete and return to us within 10 days after we deliver it to you. We will evaluate your Application under substantially the same standards as we evaluate an application for a franchise submitted by a then-new franchisee.
B. Conditions for Renewal Term. If we approve your Application, you must:
- (i) Agree in writing before the Renewal Term begins that you will make the significant capital expenditures necessary to complete a Remodel (as defined in Section 12.6.B. (Remodel)) within six months after the Renewal Term begins.
- (ii) Sign and return our then-current form of franchise agreement (the "Renewal Agreement") within 30 days after we deliver it to you and pay a renewal fee equal to 20% of the amount of the then-current Initial Franchise Fee. You agree that the Renewal Agreement may contain terms that differ materially from this Agreement.
- (iii) Sign a general release in a form we prepare, releasing us and our parents, subsidiaries, and affiliates and the respective directors, officers, owners, shareholders, partners, members, managers, representatives, employees, agents, attorneys, contractors, predecessors, successors, heirs and assigns of each of the foregoing (in their corporate and individual capacities) (collectively, the "Released Parties"), from all claims you may have against the Released Parties as of the date of the Renewal Agreement. Your Owners must also sign the general release required in the previous sentence. Released Parties is not intended to include suppliers or distributors to you that are not affiliated with us and are not acting as our agent.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, a franchisee may be granted one additional 20-year renewal term if they meet certain conditions. First, the franchisee must have substantially and timely complied with all provisions of the Franchise Agreement and any other agreements with Moe's Southwest Grill, its affiliates, or their landlord throughout the initial term. Additionally, the franchisee must not have any outstanding defaults at the time of the initial term's expiration.
To initiate the renewal process, the franchisee must request a renewal term in writing, no earlier than 12 months and no later than six months before the initial term expires. Upon receiving this request, Moe's Southwest Grill will provide an Application for a Renewal Term, which the franchisee must complete and return within 10 days. Moe's Southwest Grill will then evaluate the application using standards similar to those applied to new franchise applications.
If Moe's Southwest Grill approves the renewal application, the franchisee must agree in writing to make necessary capital expenditures to complete a remodel within six months after the renewal term begins. The franchisee must also sign the then-current form of franchise agreement (the "Renewal Agreement") and pay a renewal fee equal to 20% of the then-current Initial Franchise Fee within 30 days of receiving the Renewal Agreement. Finally, the franchisee and their owners must sign a general release, releasing Moe's Southwest Grill and its affiliates from any claims against them as of the date of the Renewal Agreement. The Renewal Agreement may contain terms that differ materially from the original agreement.