Does the removal of equipment affect the term of any agreement between Moes Southwest Grill and the customer?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1. LEASE AGREEMENT AND TERM. Company hereby leases to Customer all beverage dispensers provided to Customer ("Equipment"), subject to the terms and conditions set forth in this Lease. Unless otherwise agreed in writing, the Equipment will also include, where applicable, all permanent merchandising, menu boards, refrigeration units, ice makers and water filtration equipment provided by Company. Each piece of Equipment is leased commencing on its installation date (the "Commencement Date"). Customer may request the removal of any Equipment upon thirty (30) days prior written notice to Company. Removal of Equipment will not affect the term of any agreement between the parties. If this Lease is terminated with respect to any piece of Equipment for any reason prior to 100 months from the Commencement Date for that piece of Equipment, Customer will pay Company the actual cost of removal (including standard shipping and handling charges) and remanufacturing of that Equipment, as well as the unamortized portion of the costs of (i) installation and (ii) non-serialized parts (e.g., pumps, racks and regulators) and other ancillary equipment. Collectively, removal costs and items (i) and (ii) are referred to as "unbundling costs." The terms of this Lease will continue in effect with respect to each piece of Equipment until the Equipment has been returned to Company and will survive the expiration or termination of any agreement into which this Lease is incorporated.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moes Southwest Grill Franchise Disclosure Document, the removal of equipment does not affect the term of any agreement between the parties. Specifically, under the Dispensing Equipment Lease agreement, a franchisee may request the removal of equipment with thirty days prior written notice to Moes Southwest Grill.
However, if the lease is terminated with respect to any piece of equipment prior to 100 months from the commencement date (installation date), the franchisee will be responsible for covering certain costs. These costs include the actual cost for the removal, which includes standard shipping and handling charges, remanufacturing of the equipment, and the unamortized portion of the costs of installation and non-serialized parts such as pumps, racks, regulators, and other ancillary equipment. These costs are collectively referred to as "unbundling costs."
This clause ensures that Moes Southwest Grill is compensated for the early termination of the equipment lease, covering the expenses associated with removing, remanufacturing, and the loss of value from the equipment's early removal. The terms of the lease will remain in effect until the equipment is returned to Moes Southwest Grill and will survive the expiration or termination of any agreement into which the lease is incorporated.