If Moes Southwest Grill grants an Area of Protection, can they establish franchises outside of it?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- (ii) If we have granted you an Area of Protection, we and/or our affiliates may establish or license franchises and/or company-owned businesses offering products or services that are similar or identical to the Approved Products using the System or elements of the System under the Proprietary Marks or any other marks anywhere outside of the Area of Protection or in Captive Audience Locations inside or outside the Area of Protection.
- (iii) We and/or our affiliates may, whether inside or outside any Area of Protection, produce and/or sell Approved Products or any other products or services, and authorize others to produce and/or sell Approved Products or any other products or services, using the Proprietary Marks, the System, and any other marks and/or systems we desire through any alternative channel of distribution located anywhere, including to and through (a) supermarkets, convenience stores, club stores, and other retail facilities not dedicated to the sale of the Approved Products, (b) mail order and e-commerce channels, and (c) Delivery Kitchens.
- (iv) We and/or our affiliates may advertise, or authorize others to advertise, using the Proprietary Marks anywhere, including inside and outside any Area of Protection.
- (v) We and/or our affiliates may acquire, be acquired by, or merge with another entity with existing businesses or franchises that are similar to or competitive with the Restaurants anywhere (including inside and outside the Area of Protection (if any)) and (a) convert the other businesses to be Restaurants operating under the Proprietary Marks and the System (except inside your Area of Protection (if any)), (b) permit the other businesses to continue to operate under another name anywhere (including inside your Area of Protection (if any)), and/or (c) permit the businesses to operate under another name and convert your Restaurant and other existing Restaurants to such other name.
Source: Item 12 — Territory (FDD pages 68–72)
What This Means (2025 FDD)
According to Moes Southwest Grill's 2025 Franchise Disclosure Document, if a franchisee is granted an Area of Protection, Moes Southwest Grill and its affiliates retain the right to establish or license franchises and/or company-owned businesses offering similar products or services outside of that Area of Protection. They can also establish these businesses in Captive Audience Locations, whether inside or outside the Area of Protection. Captive Audience Locations include places like airports, stadiums, gas stations, amusement parks, supermarkets, hospitals, universities, and office buildings.
Moes Southwest Grill also reserves the right to produce and sell approved products through alternative channels of distribution, such as supermarkets, e-commerce, and delivery kitchens, regardless of whether these channels are inside or outside the Area of Protection. Additionally, Moes Southwest Grill and its affiliates can advertise anywhere, including inside and outside the Area of Protection. They can also acquire or merge with other entities that have similar or competitive businesses, and they can convert these businesses to Moes Southwest Grill restaurants outside of the franchisee's Area of Protection or allow them to continue operating under another name anywhere, even within the Area of Protection.
This means that while a Moes Southwest Grill franchisee may receive some territorial protection, the franchisor retains significant rights to expand and operate, or allow others to operate, near the franchised location. A prospective franchisee should carefully consider these reserved rights and how they might impact their business before investing in a Moes Southwest Grill franchise. Understanding the scope and limitations of the Area of Protection is crucial for assessing the potential for competition and the overall viability of the franchise.