Are contributions to the Advertising Cooperative for Moes Southwest Grill franchisees in addition to the Advertising Contribution and Grand Opening Obligation?

According to Moes Southwest Grill's 2025 Franchise Disclosure Document, contributions to an Advertising Cooperative are indeed in addition to both the Advertising Contribution and the Grand Opening Obligation. This means that franchisees should anticipate these cooperative advertising costs as separate from their other advertising expenses. However, payments to the Advertising Cooperative can be credited against the Local Marketing Obligation. This provides a potential offset, but franchisees must still budget for these additional advertising expenses.

Moes Southwest Grill may require franchisees to participate in an Advertising Cooperative, which could be local, regional, or national. The specific Advertising Cooperative will be designated by Moes Southwest Grill based on factors like the Designated Market Area. The payments to the Advertising Cooperative are determined by the participants, including the franchisee, other franchisees, and Moes Southwest Grill, as outlined in the cooperative's by-laws or membership agreements. Franchisees are obligated to adhere to the agreements and decisions made by the Advertising Cooperative.

It's important to note that if a franchisee becomes delinquent in their payments to the Advertising Cooperative or fails to comply with its agreements, it will be considered a material breach of the Franchise Agreement. However, if Moes Southwest Grill collects the entire Local Marketing Obligation from the franchisee, the franchisee will not be required to participate in an Advertising Cooperative. This offers a potential alternative for franchisees who prefer not to engage directly with a cooperative.