Is a Moes Southwest Grill franchisee obligated to purchase Company Fountain Syrups from the Company?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Each Covered Outlet will serve a core brand set of Company Fountain Beverages that consists of (i) Coca-Cola®, Diet Coke® and Sprite® on Legacy Dispensers with the remaining Company Fountain Beverages being jointly selected by Customer and Company and (ii) the standard Freestyle brand set on Freestyle Dispensers, which is subject to change from time to time. All Fountain Beverages served in the Covered Outlets will be Company Fountain Beverages; provided, however, that each Covered Outlet may serve (i) subject to the Fair Share section of this Agreement, the Fountain Beverage Permitted Exception on one valve per Legacy Dispenser in the states of Texas and Oklahoma and (ii) any Competitive Beverages that are included in the standard Freestyle brand set on Freestyle Dispensers. Customer may not dedicate any valve on a Dispenser leased from Company to dispense tap water.
Covered Outlets will have the right during the Term to purchase Company Fountain Syrups from Company at Company's then-current published chain account prices, which prices are subject to change from time to time in accordance with this Agreement.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, franchisees are generally required to purchase Company Fountain Syrups from the Company. The FDD outlines that each Covered Outlet must serve a core brand set of Company Fountain Beverages. This includes specific beverages like Coca-Cola®, Diet Coke®, and Sprite® on Legacy Dispensers, with the remaining selections jointly decided by the franchisee and the company. For Freestyle Dispensers, the standard brand set is used, which may change over time.
The agreement specifies that all Fountain Beverages served in the Covered Outlets must be Company Fountain Beverages. However, there are a couple of exceptions. In Texas and Oklahoma, franchisees can serve a Fountain Beverage Permitted Exception (regular Dr Pepper®) on one valve per Legacy Dispenser, subject to fair share agreements. Additionally, any Competitive Beverages included in the standard Freestyle brand set are allowed. The franchisee is prohibited from using any valve on a Dispenser leased from the company to dispense tap water.
In practical terms, this means that as a Moe's Southwest Grill franchisee, you will primarily be required to purchase fountain syrups from Coca-Cola. This requirement ensures brand consistency across all locations. However, the agreement does allow for some flexibility, particularly in Texas and Oklahoma, and with the Freestyle Dispensers. Franchisees should stay informed about any changes to the standard Freestyle brand set to ensure compliance. The agreement also mentions that Covered Outlets have the right to purchase Company Fountain Syrups from Company at Company's then-current published chain account prices, which prices are subject to change from time to time in accordance with this Agreement.