What are the non-competition covenants during the term of the Moes Southwest Grill franchise?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary |
|---|---|---|
| q. Non-competition covenants during the term of the franchise | Section 15.4 of Franchise Agreement | No involvement in a competitive business (generally, similar types of businesses that offer products the same or similar to the Approved Products) anywhere. You may not divert or attempt to divert any business or potential business, misuse vendor relationships, or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 77–82)
What This Means (2025 FDD)
According to the 2025 Moes Southwest Grill Franchise Disclosure Document, during the term of the franchise agreement, franchisees are subject to certain non-competition covenants. Specifically, franchisees are prohibited from involvement in any competitive business. A competitive business is defined as similar types of businesses that offer products the same or similar to Moes Southwest Grill's approved products. This restriction applies anywhere, meaning there is no geographic limitation to this non-compete clause during the franchise term.
In addition to the restriction on competitive businesses, Moes Southwest Grill franchisees are prohibited from diverting or attempting to divert any business or potential business away from Moes Southwest Grill. They are also barred from misusing vendor relationships and from performing any act that could be injurious or prejudicial to the goodwill associated with Moes Southwest Grill's proprietary marks and the System. This broad language aims to protect the brand's reputation and market position.
For a prospective franchisee, these non-competition covenants mean that while operating a Moes Southwest Grill franchise, they cannot simultaneously own or operate any other similar restaurant or business, regardless of location. Furthermore, they must actively avoid any actions that could harm Moes Southwest Grill's business interests or brand image. This is a fairly standard practice in franchising, as franchisors seek to protect their brand and prevent franchisees from using the franchisor's knowledge and resources to benefit a competing business.