What is the minimum ownership interest a Primary Contact must have in the Moes Southwest Grill franchise entity?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
You must appoint a Primary Contact who will be responsible for, and have decision-making authority regarding, the Restaurant and its operation. You may not appoint, remove, or replace the Primary Contact without our prior written approval. Your Primary Contact must (i) hold a direct or indirect, legal, or beneficial interest of 5% or more in your Entity or (ii) hold a direct or indirect, legal, or beneficial interest in your Entity and have a written agreement with you that provides for a means that such Primary Contact will increase such interest to 5% or more in your Entity. Your Primary Contact must successfully complete Primary Contact Training to our satisfaction. We may, in our sole discretion, permit your Primary Contact to serve as a Manager for the Restaurant, provided that it is their full-time job, they otherwise qualify for the position, and they successfully complete the Management Training Program.
Source: Item 15 — Obligation to Participate in the Actual Operation of the Franchise Business (FDD pages 75–76)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, if the franchisee is an entity, the Primary Contact must have a minimum ownership interest. Specifically, the Primary Contact must hold a direct or indirect, legal, or beneficial interest of 5% or more in the franchisee entity.
Alternatively, Moe's Southwest Grill may approve a Primary Contact who does not initially meet the 5% ownership threshold if they (a) hold a direct or indirect, legal, or beneficial interest in the entity and (b) have a written agreement in place that outlines how they will increase their interest to 5% or more. This provides some flexibility for franchisees in structuring their ownership and management.
This requirement ensures that the Primary Contact, who is responsible for the restaurant's operations and decision-making, has a vested interest in the success of the Moe's Southwest Grill franchise. It also gives Moe's Southwest Grill some assurance that the Primary Contact is committed to the business and aligned with the franchisor's goals. This is a fairly standard practice in franchising, as franchisors typically want key managers to have a financial stake in the business they are running.