What are the obligations of a Moes Southwest Grill franchisee regarding site selection and acquisition/lease (Item 9) and how do these obligations relate to the territory described in Item 12?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
s to be worn during training.
Cancellations. If you fail to cancel any scheduled training without at least 14 days' prior notice, or if you are not prepared to successfully participate in any scheduled training, we may charge you a cancellation fee and the cost of conducting the originally scheduled training (including any training fees and any travel and living expenses incurred by our representatives) and require you to pay an additional fee for the rescheduled training.
ITEM 12
TERRITORY
Accepted Location
Your Restaurant may only be operated at the Accepted Location. If we have not yet accepted a site for the Restaurant when we execute the Franchise Agreement, you must select a location that we accept in accordance with our site selection criteria within a site selection area that we specify. We will determine the site selection area on a case-by-case basis. You will have no exclusive or protected rights in your site selection area.
Area of Protection
You may receive a territory with limited protected rights (an "Area of Protection") as described in this Item. During the term of the Franchise Agreement, we will not establish or operate, nor license any other person to establish or operate, a Restaurant operating under the Proprietary Marks and the System at any location within the Area of Protection, except in Captive Audience Locations, Delivery Kitchens, and as otherwise provided in the Franchise Agreement. "Captive Audience Locations" include limited access and captive audience facilities, concession departments, and other types of institutional accounts, which may include (i) airports, bus and railroad terminals, and other public transportation facilities, (ii) sports arenas, stadiums, and
facilities, (iii) gasoline service stations, highway rest stops, and travel plazas, (iv) amusement parks or centers, zoos, parks, aquariums, museums, art centers, concert venues, theaters, drivein theaters, movie theaters, amphitheaters, casinos, and other entertainment or tourist facilities, (v) supermarkets, convenience stores, department stores, outlet malls and enclosed malls, (vi) food courts, (vii) hospitals and other health care facilities, (viii) universities, schools, and education facilities, (ix) convention centers, (x) military bases, and (xi) office buildings, business complexes, condominiums, dormitories, other high-density locations, and other similar non-restaurant locations. "Delivery Kitchens" include kitchens devoted to the preparation of products or Approved Products (often referred to as ghost, dark, or cloud kitchens), which may use the Marks and may deliver to customers located anywhere.
We may negotiate with you your Area of Protection. The size and scope of the Area of Protection will be in the Franchise Agreement and will be determined on a case-by-case basis. The factors that we consider in determining the size of an Area of Protection include current and projected market demand, demographics and population based on our research and experience, median household income, presence of other businesses, location of competitors, traffic patterns, access and visibility, location of other Restaurants, our future development plans and other market conditions. However, there is no minimum Area of Protection for a Restaurant, if we grant you one.
If we do not grant you an Area of Protection, you will not receive a protected territory. You may face competition from other franchisees, from outlets that we own, or from other channels of distribution or competitive brands that we control.
If the Accepted Location is not known when you sign the Franchise Agreement, we will designate the Area of Protection once we authorize a location for the Restaurant and the Accepted Location and Area of Protection will be documented when we accept the location. If the Accepted Location is known when you sign the Franchise Agreement, the Franchise Agreement will specify the Accepted Location for your Restaurant and the Area of Protection.
If you default under the Franchise Agreement and fail to cure the default in the applicable cure period (if any), we have the right to reduce or eliminate your Area of Protection, in addition to our other remedies.
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill FDD, franchisees have specific obligations regarding site selection and acquisition/lease, as outlined in Item 9 and further detailed in Item 11 and the Franchise Agreement. Moe's Southwest Grill must review and accept the location chosen by the franchisee, ensuring it meets the minimum site criteria before it becomes the 'Accepted Location.' The franchisee cannot acquire the location until Moe's Southwest Grill has given its approval. If a site hasn't been agreed upon when the Franchise Agreement is signed, the franchisee must find a location within a specified geographic area that meets Moe's Southwest Grill's criteria. Moe's Southwest Grill may require a site selection analysis from an approved supplier, costing an estimated $2,500 to $5,000, to assess factors like traffic, demographics, and competition. Moe's Southwest Grill considers factors such as population density, traffic flow, visibility, parking, household income, and local competition when evaluating potential sites. While Moe's Southwest Grill may offer assistance, they are not obligated to help in site selection and typically do not lease or sublease locations. The franchisee is expected to conduct their own due diligence and retain an independent expert to evaluate the site's suitability. Moe's Southwest Grill disclaims any responsibility for the site's success, with their acceptance only indicating that the site meets their minimum criteria.
Regarding the acquisition or lease, the franchisee is solely responsible for negotiating the terms of the Site Agreement (lease or purchase agreement) and ensuring performance under it. Moe's Southwest Grill has the right, but not the obligation, to review the Site Agreement to ensure it meets their requirements. The franchisee must also use a designated or pre-approved general contractor for the buildout, bearing the expense, unless Moe's Southwest Grill approves an alternative contractor in writing. Moe's Southwest Grill's approval of a contractor does not constitute an endorsement or liability for their performance.
Item 12 of the Moe's Southwest Grill FDD details the territory granted to the franchisee. The restaurant must operate only at the 'Accepted Location.' If a site hasn't been accepted when the Franchise Agreement is executed, the franchisee must select a site within a specified area that meets Moe's Southwest Grill's criteria. The franchisee does not have exclusive rights within the site selection area. The franchisee may receive an 'Area of Protection,' where Moe's Southwest Grill will not establish or license another restaurant operating under its marks, with exceptions for 'Captive Audience Locations' and 'Delivery Kitchens.' Captive Audience Locations include facilities like airports, stadiums, gas stations, amusement parks, supermarkets, hospitals, universities, and office buildings. Delivery Kitchens are devoted to preparing products and may deliver anywhere, using the Moe's Southwest Grill marks. If a franchisee signs multiple agreements, a Multi-Unit Addendum outlines site selection areas and development deadlines, but these areas are not exclusive until a site is accepted and an addendum is signed, including an Area of Protection for each restaurant. The franchisee has no right of first refusal or similar rights to acquire additional franchises or establish additional restaurants, unless provided in a Multi-Unit Addendum. The franchisee may request to relocate the restaurant if they lose the right to operate at the Accepted Location or have other business justifications, but Moe's Southwest Grill must approve the relocation in writing. The franchisee must comply with the site approval process, be in compliance with the Franchise Agreement, and have the funds to relocate and construct a new restaurant according to current standards. Moe's Southwest Grill is not obligated to approve a relocation and may terminate the Franchise Agreement if the franchisee loses the right to occupy the premises.