Can Moes Southwest Grill require franchisees to participate in loyalty programs?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
provide credit card data and security services that are consistent with PCI-DSS requirements, including a managed firewall, quarterly network scans, endpoint detection and response solutions, and managed Wi Fi. We may also require you to obtain data breach protection insurance provided by |
| Type of Fee1 | Amount | Date Due | Remarks |
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| such Approved Supplier. We require that | |||
| you submit annually proof of your PCI-DSS | |||
| compliance status. We may also charge an | |||
| administrative fee to review your systems | |||
| and | |||
| verify | |||
| your | |||
| compliance | |||
| with | |||
| these | |||
| requirements. These fees are subject to | |||
| change, but any fees that we or our affiliates | |||
| charge will not exceed 110% of our or our | |||
| affiliates' actual costs and expenses. | |||
| Gift Card and Loyalty Program Fees | Amount of administrative fees | As incurred | You must participate in the gift card, loyalty, and other electronic incentive programs (the "Gift Card and Loyalty Programs") that we establish, using vendors that we designate, which may include us or our affiliates. We or our affiliates may charge, or collect on behalf of our vendors, an administrative cost for participating in these programs. Currently, our gift card distributor retains 7.75% or 12% of the value of a gift card purchased from a retailer other than a Restaurant (with the percentage varying by retailer). If a gift card is redeemed in your Restaurant, we will reimburse the redeemed amount minus the 7.75% or 12% administrative fee retained by the vendor. In addition, currently, you must pay our designated gift card processor $4.50 per Restaurant per month to cover unlimited transactions and settlement processing. These fees are subject to change, but any fees that we or our affiliates charge will not exceed 110% of our or their actual costs and expenses. |
| Loyalty App Fee | Currently, $62 per month. | As incurred | You are required to participate in our loyalty program. This fee is payable to us or a vendor that we designate for use of our designated loyalty app. This fee is subject to change. |
| Online Ordering Fee | The then-current fee. Currently, $111 per month, plus a per transaction fee (currently, 0.04% per transaction) and additional charges based on services subscribed to | As incurred | You must participate in our online ordering program. This fee is payable to us or a vendor that we designate. Additional fees may apply based on our vendor contracts. These fees are subject to change, but any fees that we or our affilia |
Source: Item 6 — Other Fees (FDD pages 30–41)
What This Means (2025 FDD)
According to Moes Southwest Grill's 2025 Franchise Disclosure Document, franchisees are required to participate in loyalty programs. Specifically, franchisees must participate in the gift card, loyalty, and other electronic incentive programs that Moes Southwest Grill establishes, using designated vendors, which may include Moes Southwest Grill or its affiliates.
Moes Southwest Grill or its affiliates may charge an administrative cost for participating in these programs. As an example, the gift card distributor retains 7.75% or 12% of the value of a gift card purchased from a retailer other than a Restaurant, with the percentage varying by retailer. If a gift card is redeemed in a franchisee's Restaurant, Moes Southwest Grill will reimburse the redeemed amount minus the 7.75% or 12% administrative fee retained by the vendor. Additionally, franchisees must pay Moes Southwest Grill's designated gift card processor $4.50 per Restaurant per month to cover unlimited transactions and settlement processing.
Franchisees are also required to participate in Moes Southwest Grill's loyalty program and pay a Loyalty App Fee, which is currently $62 per month. This fee is payable to Moes Southwest Grill or a vendor that they designate for use of their designated loyalty app. These fees are subject to change, but any fees that Moes Southwest Grill or its affiliates charge will not exceed 110% of their actual costs and expenses. Moes Southwest Grill also states that franchisees will participate at their own cost in temporary or permanent promotional campaigns that Moes Southwest Grill establishes (e.g., limited time offers, gift cards, coupons, loyalty programs, customer relationship management, and other supplemental marketing programs).
This requirement to participate in loyalty programs and the associated fees are common in franchise systems, as they allow the franchisor to maintain brand consistency and implement marketing strategies across all locations. However, it's important for prospective franchisees to understand the costs associated with these programs and how they may impact their profitability.