Can Moes Southwest Grill designate itself or its affiliates as the sole source for required purchases?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
isees for any of these items. The availability and terms of financing will depend on factors like the availability of financing generally, your credit worthiness, collateral you pledge, policies of your lending institution, and economic conditions in your area.
ITEM 8
RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES
Required Purchases. We have the right to require that Approved Products, other products, Proprietary Ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services (collectively, "Goods") that you purchase for resale or purchase or lease for use in your Restaurant: (i) meet specifications that we establish from time to time; (ii) be a specific brand, kind, or model; (iii) be purchased or leased only from Approved Suppliers; (iv) be purchased or leased only from a single source that we designate (which may include us or our affiliates or a buying cooperative organized by us or our affiliates); and/or (v) be purchased as part of a purchasing program, arrangement, or contract that we negotiate or specify. We may add or change Approved Suppliers at any time.
You must purchase all of your requirements of Proprietary Ingredients, Proprietary Products, and proprietary uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging (collectively, the "Proprietary Goods") from us, our affiliates, or our designated Approved Suppliers. The Proprietary Goods include printed paper, paper products, and plastic products bearing our Proprietary Marks (including, for example, dishes, containers, cartons, bags, napkins, and packaging supplies). We may require you to purchase certain trademarked product lines consisting of t-shirts, apparel, mugs and other merchandise and products bearing the Proprietary Marks ("Trademarked Product Lines") from us, our affiliates, or our designated Approved Suppliers. In addition, if we conduct test marketing to determine consumer trends and the salability of new food or non-food products and services, you may be required to purchase a reasonable quantity of test products we specify from designated Approved Suppliers.
For any proposed site, we may require you to obtain a site selection analysis from an Approved Supplier, which may include an analysis of such factors as traffic patterns, demographics and competitors within the market. As you design and construct your Restaurant, you must hire an architect that we accept in writing to prepare your plans and make any necessary changes to our standard layout and specifications. In addition, you must hire a licensed and insured general contractor that we accept to complete the build-out of your Restaurant. Our acceptance of your architect or general contractor will not in any way be our endorsement of your architect or general contractor or render us liable for your architect's or general contractor's performance. When you
refresh or remodel your Restaurant, we may require you to obtain, at your expense, a site survey and design solution from us, our affiliates, or a designated vendor.
You must purchase and install, at your expense, all fixtures, furnishings, equipment (including a Computer System), décor and signs, as we direct. If we modify our menu, we may require you to purchase additional equipment to prepare and store new menu items.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 47–51)
What This Means (2025 FDD)
According to Moes Southwest Grill's 2025 Franchise Disclosure Document, Moes Southwest Grill has the right to require franchisees to purchase or lease goods from a single designated source, which may include Moes Southwest Grill itself or its affiliates. This applies to approved products, other products, proprietary ingredients, supplies (including chemicals), furniture, fixtures, equipment, and services used for resale or in the restaurant.
Moes Southwest Grill also mandates that franchisees purchase all proprietary goods, such as proprietary ingredients, uniforms, signs, menu boards, smallwares, materials, supplies, paper goods, equipment, and packaging, from Moes Southwest Grill, its affiliates, or designated approved suppliers. This also extends to trademarked product lines like t-shirts, apparel, mugs, and other merchandise bearing the company's proprietary marks. Moes Southwest Grill may also require franchisees to purchase test products from designated approved suppliers to determine consumer trends and the salability of new food or non-food products and services.
Currently, neither Moes Southwest Grill nor its affiliates are approved suppliers for any goods that franchisees are required to purchase or lease, with the exception of POS System support services from its affiliate. However, Moes Southwest Grill and its affiliates reserve the right to become an approved supplier or the only approved supplier for any goods in the future. The FDD estimates that purchases from approved suppliers and under their standards will be about 85% of the total purchases and leases needed to establish the restaurant and about 90% needed to operate the restaurant.
Moes Southwest Grill may receive payments based on franchisee purchases and leases, including from charging franchisees for goods they provide and from promotional allowances, volume discounts, and other payments made to them by suppliers, distributors, or third parties. These amounts can be used without restriction for any purposes Moes Southwest Grill or its affiliates deem appropriate.