What happens if the lease for the Moes Southwest Grill location is terminated?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchised Business promptly and completely, rendering all necessary assistance to us to enable us to take prompt possession, and you will have no right to any revenue that we earn while operating the Franchised Business. If you dispute the validity of our termination of this Agreement, we will nevertheless have the option, which you irrevocably grant, to operate the Franchised Business pending the final, unappealed determination of the dispute under this Agreement. If an arbitrator or court of competent jurisdiction makes a final, unappealed determination that the termination was not valid, we will make a full and complete accounting for the period during which we operated the Franchised Business.
- B. Right to Acquire Accepted Location. If we terminate this Agreement under Section 17 (Default and Termination), you will, at our option, assign to us, or another franchisee we designate, your interest in any Lease for the Accepted Location, and will vacate the Franchised Business promptly and completely, rendering all necessary assistance to us or the other franchisee to enable it to take prompt possession. If you or one of your affiliates owns the Accepted Location, we may elect to purchase the Accepted Location or, at our option, lease the Accepted Location from you or that affiliate for an initial five-year term with one renewal term of five years (at our option) on commercially reasonable terms.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, if the Franchise Agreement is terminated due to franchisee default, Moe's Southwest Grill has the option to require the franchisee to assign their interest in the lease for the location to Moe's Southwest Grill or another designated franchisee. The franchisee must then promptly vacate the premises and provide assistance to facilitate the transfer of possession.
If the franchisee or an affiliate owns the location, Moe's Southwest Grill can choose to purchase or lease the location. The lease would be for an initial five-year term, with an option for Moe's Southwest Grill to renew for another five years on commercially reasonable terms. If Moe's Southwest Grill and the franchisee cannot agree on a purchase price within a reasonable timeframe, the price will be determined by three independent appraisers using an appraisal process.
Moe's Southwest Grill can offset any amounts owed by the franchisee or their affiliates against payments for the purchase of the location. The franchisee and their owners must ensure their affiliates comply with these requirements. Additionally, Moe's Southwest Grill requires that the lease agreement includes a provision that the landlord reserves the right to assign the leasehold interest to Moe's Southwest Grill and allow them to occupy the location upon termination or expiration of the Franchise Agreement or default under the lease.