Are the costs for promotional campaigns established by the Advertising Cooperative for Moes Southwest Grill the responsibility of the franchisee?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of Fee1 | Amount | Date Due | Remarks |
|---|---|---|---|
| than 1% of Net Sales on local market advertising. | See Item 11 for what will count towards meeting your obligation. If you fail to make the minimum advertising expenditures, we may do so on your behalf and you must reimburse us for our expenses. We may also elect to collect all or a portion of the Local Marketing Obligation from you and (i) contribute it to the Ad Fund, (ii) conduct national, regional, or local advertising, (iii) spend it on local advertising, or (iv) contribute it to your Advertising Cooperative. | ||
| Promotions and Advertising Materials | Up to 110% of our or our affiliates' actual costs and expenses related to the goods you purchase from us or them. | As incurred | You will participate at your own cost in temporary or permanent promotional campaigns that we establish (e.g., limited time offers, gift cards, coupons, loyalty programs, customer relationship management, and other supplemental marketing programs), which may be applicable to the System as a whole or to specific advertising market areas, and promotional programs your Advertising Cooperative establishes. We may require or permit you to purchase items from us or our affiliates necessary to participate in such campaigns, such as counter cards posters, banners, signs, photographs, loyalty program rewards, give-away items, and gift cards. |
Source: Item 6 — Other Fees (FDD pages 30–41)
What This Means (2025 FDD)
According to Moes Southwest Grill's 2025 Franchise Disclosure Document, franchisees are responsible for the costs associated with promotional campaigns established by their local Advertising Cooperative. Franchisees must participate at their own cost in both temporary and permanent promotional campaigns. These campaigns can be system-wide or specific to certain advertising market areas.
These promotional campaigns may include limited time offers, gift cards, coupons, loyalty programs, customer relationship management, and other supplemental marketing programs. To participate in these campaigns, Moes Southwest Grill may require franchisees to purchase necessary items from them or their affiliates. These items can include counter cards, posters, banners, signs, photographs, loyalty program rewards, give-away items, and gift cards.
This means that franchisees should budget for these promotional costs, as participation is mandatory. The franchisor has the discretion to implement various promotional activities and require franchisees to purchase specific materials, impacting the franchisee's overall expenses. Franchisees should inquire about the typical frequency and cost of these campaigns to better understand their financial obligations.