What relocation fee may Moes Southwest Grill charge a franchisee to relocate their business?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
ed Business according to our then-current design standards.
- B. Relocation Conditions. If we approve, in our sole discretion, the relocation of the Franchised Business under this Section 5.5, you agree to comply with the following conditions:
- (i) the new location will be considered the "Accepted Location" as used in this Agreement;
- (ii) all Site Agreements you enter into to secure the new location must comply with Section 5.4 (Site Acquisition);
- (iii) you must make or cause to be made to the former Accepted Location such changes in the signs and interior and exterior of the former Accepted Location so as to effectively distinguish such location from any other Business;
- (iv) we may charge you a relocation fee equal to 10% of the then-current Initial Franchise Fee to cover costs and expenses incurred by us or our affiliates in connection with any such acceptance, evaluation, and relocation of the Franchised Business;
- (v) we may require you to pay an agreed minimum royalty to us during the period in which the Franchised Business is not in operation (if any); and
- (vi) we may require you to sign our then-current form of franchise agreement to replace this Agreement (the "New Franchise Agreement") or any other documents we may require to amend this Agreeme
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, if Moe's Southwest Grill approves a franchisee's request to relocate their franchised business, they may charge a relocation fee. This fee is calculated as 10% of the then-current Initial Franchise Fee. This fee is intended to cover the costs and expenses incurred by Moe's Southwest Grill or its affiliates in connection with the acceptance, evaluation, and relocation process.
In addition to the relocation fee, Moe's Southwest Grill may also require the franchisee to meet several other conditions. These include ensuring that any site agreements for the new location comply with site acquisition guidelines, making necessary changes to the former location to distinguish it from the Moe's Southwest Grill brand, and potentially paying a minimum royalty during any period when the business is not operational during the relocation.
Furthermore, Moe's Southwest Grill has the option to require the franchisee to sign the then-current form of the franchise agreement, which may contain terms that differ materially from the original agreement. However, the franchisee will not be required to pay another initial franchise fee if they sign a new franchise agreement. If the lease term for the new location extends beyond the original term of the agreement, Moe's Southwest Grill may extend the agreement's term to match the lease term, but this would require the franchisee to pay a relocation extension fee of $1,500 multiplied by the number of years the new lease extends beyond the original expiration date.