Where can the Producer Price Index (PPI) be found for Moes Southwest Grill pricing calculations?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- c. Company agrees that the pricing for HFCS Sweetener purchased in the 48 contiguous United States and the District of Columbia in any given calendar year will be determined as follows. Company will calculate the difference between the monthly average of the Producer Price Index for Corn Sweetener as published by the Department of Labor ("PPI") for (i) the most recent prior October through September period ("PPI Most Recent Average") and (ii) the second most recent October through September period ("PPI Second Most Recent Average"). Company will then calculate what the percentage of this difference is as compared to the PPI Second Most Recent Average. If the percentage is positive (i.e., the PPI Most Recent Average was greater than the PPI Second Most Recent Average), then Company will not increase its HFCS Sweetener pricing in the given calendar year over the prior calendar year's most recent pricing by more than this percentage. If the percentage is negative (i.e., the PPI Most Recent Average was less than the PPI Second Most Recent Average), then Company will decrease its HFCS Sweetener pricing in the given calendar year by this percentage compared to the prior calendar year's most recent pricing. See Example 2 in Exhibit 5-2. The published PPI can be found at: http://www.bls.gov/ppi/ppi
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the Producer Price Index (PPI) used in calculating the price of HFCS Sweetener can be found on the Department of Labor's website. Specifically, the document states that the published PPI can be accessed at http://www.bls.gov/ppi/ppi_dr.htm. This index is used to determine potential adjustments to the price of HFCS Sweetener, with the company calculating the difference between monthly averages of the PPI for corn sweetener over specific periods.
The PPI is a key factor in determining whether Moe's Southwest Grill will increase or decrease the price of HFCS Sweetener in a given calendar year. The company compares the PPI from the most recent October-September period to the second most recent October-September period. If the PPI has increased, the company will not increase its HFCS Sweetener pricing by more than that percentage. Conversely, if the PPI has decreased, the company will decrease its pricing accordingly.
It's important to note that if the Department of Labor stops publishing the PPI, materially changes it, or if Moe's Southwest Grill uses a different nutritive sweetener than HFCS, the company reserves the right to establish a different pricing methodology at its sole discretion. Franchisees should stay informed about these potential changes, as they could impact the cost of ingredients and, consequently, their profitability.