What is considered a 'Competitive Business' in the context of the non-compete agreement for a Moes Southwest Grill franchise?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
requires to transmit Customer Information to us and our affiliates, and for us and our affiliates to use that Customer Information, in the manner that this Agreement contemplates.
- 15.4 Restrictive Covenants. You agree that you will require all Owners to sign the Personal Covenants in Schedule B. You agree that you will comply with the following restrictions:
- A. During the Term. During the Term, without our prior written consent, neither you nor any of your Owners, nor any person or Entity controlling, controlled by, or under common control with you or them, will individually or jointly with others, directly or indir
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, a 'Competitive Business' is defined within the context of restrictive covenants related to franchise operations. Specifically, a 'Competitive Business' includes any business that meets any of the following criteria:
First, it encompasses any business deriving more than 20% of its annual revenue from the retail or wholesale production or sale of 'Competing Products,' which are Mexican-type menu items or items similar to Moe's Southwest Grill's main course Approved Products. Second, it includes any business that is the same as or similar to the Moe's Southwest Grill business concept as it evolves. Finally, it covers any entity that grants franchises or licenses for these types of businesses. However, this definition excludes the franchisee's own Moe's Southwest Grill franchise or any other business they operate under an agreement with the franchisor.
This definition is important for prospective franchisees as it outlines the scope of activities they are restricted from engaging in, both during the term of the franchise agreement and for a specified period after its termination. Understanding this definition is crucial for franchisees to avoid violating the non-compete clauses, which could result in legal repercussions or loss of their franchise.