For Moes Southwest Grill, what is included in the definition of 'Equipment' under the lease agreement?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Company hereby leases to Customer all beverage dispensers provided to Customer ("Equipment"), subject to the terms and conditions set forth in this Lease. Unless otherwise agreed in writing, the Equipment will also include, where applicable, all permanent merchandising, menu boards, refrigeration units, ice makers and water filtration equipment provided by Company. Each piece of Equipment is leased commencing on its installation date (the "Commencement Date"). Customer may request the removal of any Equipment upon thirty (30) days prior written notice to Company. Removal of Equipment will not affect the term of any agreement between the parties. If this Lease is terminated with respect to any piece of Equipment for any reason prior to 100 months from the Commencement Date for that piece of Equipment, Customer will pay Company the actual cost of removal (including standard shipping and handling charges) and remanufacturing of that Equipment, as well as the unamortized portion of the costs of (i) installation and (ii) non-serialized parts (e.g., pumps, racks and regulators) and other ancillary equipment. Collectively, removal costs and items (i) and (ii) are referred to as "unbundling costs." The terms of this Lease will continue in effect with respect to each piece of Equipment until the Equipment has been returned to Company and will survive the expiration or termination of any agreement into which this Lease is incorporated.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, the definition of "Equipment" under the Dispensing Equipment Lease includes all beverage dispensers provided to the franchisee. Unless otherwise agreed to in writing with Moe's Southwest Grill, the equipment also includes permanent merchandising, menu boards, refrigeration units, ice makers, and water filtration equipment provided by the company.
This means that as a franchisee, you are leasing this equipment from Moe's Southwest Grill, and it remains their property. You are responsible for maintaining and repairing the equipment, and you cannot alter it without prior written consent from the company. Any alterations or additions become the property of Moe's Southwest Grill.
If the lease is terminated before 100 months from the installation date, the franchisee is responsible for the actual cost of removal and remanufacturing of the equipment, as well as the unamortized portion of the costs of installation and non-serialized parts. This could represent a significant expense if a franchisee closes or transfers their location before the 100-month period is up. Prospective franchisees should carefully consider these potential costs and negotiate the terms of the lease agreement accordingly.