Does the Moes Southwest Grill Franchise Agreement grant me any automatic rights to a Renewal Term?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- C. No Automatic Right. You agree that this Agreement does not grant you any automatic rights to a Renewal Term and that we will not be obligated to offer you a Renewal Term. The sole basis for any extension of your franchise rights beyond the Initial Term is in this Section.
- D. Extension Period. If you do not timely comply with the renewal procedures and conditions set forth in this Section and you continue to operate the Franchised Business beyond the Initial Term, this Agreement shall be extended on a month-to-month basis until such time as (i) the conditions set forth in this Section are satisfied or (ii) we notify you that this Agreement is terminated (the "Extension Period") (in which case, you must fully comply with all provisions of this Agreement throughout the Extension Period, as if this Agreement had not expired, and upon notice of termination of this Agreement, you shall comply with all post-termination obligations in this Agreement).
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, the franchise agreement does not grant franchisees any automatic rights to a renewal term. The decision to offer a renewal term is at the discretion of Moe's Southwest Grill.
To be considered for a renewal term, a franchisee must substantially comply with all provisions of the Franchise Agreement and other agreements with Moe's Southwest Grill or their landlord throughout the initial term. Additionally, the franchisee must request a renewal in writing no earlier than 12 months and no later than six months before the initial term expires. Moe's Southwest Grill will then provide an application for renewal, which the franchisee must complete and return within 10 days.
Moe's Southwest Grill evaluates the renewal application using similar standards to those applied to new franchise applications. If approved, the franchisee must agree to make necessary capital expenditures for remodeling within six months of the renewal term's start. They must also sign the then-current form of the franchise agreement, which may have materially different terms from the original agreement, and pay a renewal fee equal to 20% of the then-current initial franchise fee. A general release of claims against Moe's Southwest Grill and its affiliates is also required.
If a franchisee continues to operate the Moe's Southwest Grill business after the initial term without complying with the renewal procedures, the agreement extends on a month-to-month basis. This extension continues until the renewal conditions are met, or Moe's Southwest Grill terminates the agreement, in which case all post-termination obligations apply.