From what date does the 20-year initial term of the Moes Southwest Grill franchise agreement begin?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
d operation of one or more franchises with us and to conducting all business and financing activities related to such franchises. The Owners may not enter into any shareholders' agreement, management or operating agreement, voting trust, or other arrangement that gives a third party the power to direct and control your affairs without our prior written consent. During the Term, your governing documents must provide that no transfer of any ownership interest may be made, except in accordance with Section 16 (Transfer) of this Agreement. Any securities that you issue must bear a conspicuous printed legend to that effect.
2. TERM AND RENEWAL TERM
2.1 Initial Term. The initial term of this Agreement (the "Initial Term") will begin on the Effective Date and will end 20 years from the date that your Franchised Business opens for business (the "Opening Date"), unless this Agreement is terminated sooner as provided in other sections of this Agreement.
2.2 Renewal Term.
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").
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, the initial term of the franchise agreement begins on the Effective Date and concludes 20 years from the date the Franchised Business opens. This is referred to as the "Opening Date".
For a prospective franchisee, this means the 20-year clock doesn't start ticking when you sign the agreement. Instead, it begins when you actually open your Moe's Southwest Grill restaurant for business. This is a common arrangement in franchising, as it aligns the term with the franchisee's operational period and revenue generation.
It is important to note that the agreement can be terminated sooner if certain conditions are met, as detailed in other sections of the Franchise Agreement. Moe's Southwest Grill may also grant one additional 20-year renewal term at their discretion.