What is the maximum Allowed Adjustment that Moes Southwest Grill can make to any fee in a calendar year?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
For any fee specified in this Agreement that may be increased by no more than the Allowed Adjustment, the "Allowed Adjustment" in any calendar year will not exceed, at our option, (a) 50% of the fee that is in effect at the start of the calendar year or (b) the increase in the actual costs and expenses that we or our affiliates incur to provide such goods or services to you.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the maximum "Allowed Adjustment" for fee increases in any calendar year is determined at the franchisor's option. Moe's Southwest Grill can choose between two options: either increase a fee by up to 50% of what it was at the start of the year, or increase it to cover the actual increase in costs and expenses that Moe's Southwest Grill or its affiliates incur to provide the related goods or services.
This policy impacts various fees that franchisees may be charged, such as the Technology Fee, fees for modifications and enhancements to the Computer System, fees for support services, and non-compliance fees. It's important to note that while Moe's Southwest Grill has the right to adjust these fees, the adjustment is capped by the "Allowed Adjustment" provision, providing some predictability for franchisees in terms of potential cost increases.
For a prospective Moe's Southwest Grill franchisee, this means that certain fees could potentially increase significantly from year to year, up to 50% of the starting fee or the actual increase in the franchisor's costs. Franchisees should carefully consider this when budgeting and projecting their potential expenses. It is also important to understand which fees are subject to the "Allowed Adjustment" and to monitor any notices from Moe's Southwest Grill regarding fee modifications.