What is the purpose of the Maryland Addendum to the Disclosure Document for Moes Southwest Grill franchises?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
In recognition of the requirements of the Maryland Franchise Registration and Disclosure Law, the Disclosure Document for Moe's Franchisor SPV LLC for use in the State of Maryland is amended as follows:
ITEM 5 INITIAL FEES
- Based upon our financial condition, the Maryland Securities Commissioner has required a financial assurance. Therefore, all initial fees and payments owed by franchisees shall be deferred until we complete our pre-opening obligations under the Franchise Agreement. If a franchisee signs a Multi-Unit Addendum to a Franchise Agreement, all initial fees and payments owed by such franchisee under each of the Franchise Agreements that is subject to the Multi-Unit Addendum shall be deferred until we complete our pre-opening obligations under the applicable Franchise Agreement.
ITEM 17 RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION:
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- The general release required as a condition of renewal, transfer, and sale will not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
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- Item 17.v. of this Disclosure Document is modified as follows:
A franchisee may sue in Maryland for claims arising under the Maryland Franchise Registration and Disclosure Law, as long as the nature of the litigation is not the type of dispute, controversy, claim, action or proceeding which would be subject to arbitration under the Franchise Agreement. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within 3 years after the grant of your franchise.
- Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, the Maryland Addendum addresses specific legal requirements within the state. It amends the standard disclosure document to comply with the Maryland Franchise Registration and Disclosure Law.
Specifically, the addendum addresses initial fees, stating that due to the franchisor's financial condition, the Maryland Securities Commissioner requires a financial assurance. As a result, all initial fees and payments owed by franchisees in Maryland are deferred until Moe's Southwest Grill completes its pre-opening obligations under the Franchise Agreement. This deferral also applies to franchisees who sign a Multi-Unit Addendum, ensuring that fees are not due until pre-opening obligations are met for each franchise.
The addendum also modifies Item 17 regarding renewal, termination, transfer, and dispute resolution. It clarifies that the general release required for renewal, transfer, and sale will not apply to liabilities under the Maryland Franchise Registration and Disclosure Law. Furthermore, franchisees in Maryland have the right to sue under this law, provided the dispute is not subject to arbitration under the Franchise Agreement. Any claims arising under the Maryland Franchise Registration and Disclosure Law must be brought within three years after the grant of the franchise.