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

According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, Moe's Southwest Grill is not a fiduciary with respect to advertising contributions or the Ad Fund. This means that Moe's Southwest Grill does not have a legal obligation to act in the best interest of its franchisees when managing the Ad Fund. The Ad Fund is not considered a trust, and Moe's Southwest Grill is not required to maintain the Ad Fund in a separate account or have an independent audit completed.

This arrangement gives Moe's Southwest Grill significant control over the Ad Fund. Moe's Southwest Grill has sole authority to direct all advertising programs, promotions, and uses of the Ad Fund, including creative concepts, materials, media, placement, and allocation of advertising. Moe's Southwest Grill is not obligated to ensure that expenditures from the Ad Fund are proportionate or equivalent to a franchisee's contributions or that the franchised business will directly benefit from the advertising.

For a prospective franchisee, this means that while you are required to contribute to the Ad Fund, Moe's Southwest Grill has broad discretion in how those funds are spent. There is a risk that the advertising may not directly benefit your specific location or market. However, Moe's Southwest Grill will provide an annual summary of the Ad Fund expenditures upon reasonable request. It is important to note that any monies remaining in the Ad Fund at the end of the fiscal year will carry over into the next fiscal year.