Can Moes Southwest Grill require franchisees to participate in purchasing programs?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
ons**. Currently, we estimate that your purchases from Approved Suppliers and otherwise under our Standards will be about 85% of the
total purchases and lease of products and services needed to establish the Restaurant and about 90% of the total purchases and leases of products and services needed to operate a Restaurant.
Cooperatives and Purchasing Arrangements. Currently, neither we nor MFL have arranged any purchasing and/or distribution cooperatives, associations, or programs (collectively, "Purchasing Programs") among our franchisees. We have the right to form Purchasing Programs at any time. If we do form a Purchasing Program, you must (i) become a member by the deadlines we specify, (ii) remain a member in good standing of the Purchasing Program throughout the term of your Franchise Agreement, and (iii) pay all reasonable membership fees assessed by any Purchasing Programs.
We may, but are not required to, use the services of a food broker to negotiate purchase arrangements, monitor Suppliers, conduct inspections, and carry out various other services related to Suppliers.
Source: Item 8 — Restrictions on Sources of Products and Services (FDD pages 47–51)
What This Means (2025 FDD)
According to Moes Southwest Grill's 2025 Franchise Disclosure Document, Moes Southwest Grill has the right to form purchasing programs at any time and can require franchisees to participate in them. If Moes Southwest Grill forms a purchasing program, franchisees must become members by the specified deadlines, remain members in good standing throughout the term of the Franchise Agreement, and pay all reasonable membership fees assessed by the purchasing programs.
Currently, neither Moes Southwest Grill nor MFL have arranged any purchasing programs among their franchisees. However, Moes Southwest Grill retains the right to establish these programs in the future. If implemented, participation would become mandatory for franchisees.
Moes Southwest Grill also has the right to require that franchisees purchase goods as part of a purchasing program, arrangement, or contract that they negotiate or specify. This gives Moes Southwest Grill significant control over where franchisees source their products and supplies. While franchisees may benefit from negotiated pricing and volume discounts through these programs, they must also be prepared to adhere to the franchisor's mandates regarding participation and associated fees.