Is Moes Southwest Grill considered a fiduciary with respect to advertising contributions or the Ad Fund?

According to the 2025 FDD, Moes Southwest Grill does not act as a fiduciary regarding advertising contributions or the Ad Fund. The FDD explicitly states that Moes Southwest Grill is not required to keep the Ad Fund separate from its other funds and is not obligated to have an independent audit of the Ad Fund completed. However, Moes Southwest Grill will provide franchisees with an annual summary of the Ad Fund's expenditures upon reasonable request.

This arrangement means that Moes Southwest Grill has considerable discretion in managing and using the Ad Fund. While franchisees contribute to the Ad Fund, Moes Southwest Grill has sole authority over advertising programs, creative content, and media placement. This setup is not uncommon in franchising, where the franchisor typically controls marketing strategies to maintain brand consistency and maximize impact.

For a prospective Moes Southwest Grill franchisee, this implies that while they must contribute to the Ad Fund, they have limited direct control over how those funds are spent. The franchisee must rely on Moes Southwest Grill's expertise in advertising and promotion. It is important for franchisees to review the annual summary of expenditures to understand how the Ad Fund is being utilized and to raise any concerns through appropriate channels, such as a franchisee advisory council if one exists.