Does Moes Southwest Grill reserve the right to allocate advertising expenditures to any regions?

According to the 2025 FDD, Moes Southwest Grill retains significant control over advertising and promotional expenditures, including the right to allocate them to specific regions or locales. Moes Southwest Grill has sole authority to direct all advertising programs and promotions and uses of the Ad Fund, with sole control over the creative concepts, materials, and media used in the programs, and the placement and allocation of advertising. Moes Southwest Grill reserves the right to use any media, create any programs, and allocate advertising and promotional expenditures to any regions or locales it deems appropriate.

This means that as a Moes Southwest Grill franchisee, you may not have direct control over how the mandatory advertising contributions are spent in your specific market. The advertising and promotions that Moes Southwest Grill conducts are intended to maximize general public recognition and patronage of the System generally in the manner that it determines to be most effective. Moes Southwest Grill is not obligated to ensure that any advertising impacts or penetrates your area.

Moes Southwest Grill also mandates a Local Marketing Obligation, requiring franchisees to spend at least 1% of Net Sales each calendar quarter on local market advertising. However, Moes Southwest Grill has the right to direct how this local marketing obligation is spent. Moes Southwest Grill can require franchisees to pay all or a portion of the Local Marketing Obligation to them, which Moes Southwest Grill can then contribute to the Ad Fund, spend on national, regional, or local advertising campaigns, contribute to the franchisee's Advertising Cooperative, or spend on local advertising in the franchisee's market. If Moes Southwest Grill exercises this right to collect the entire Local Marketing Obligation, the franchisee will not be required to spend a minimum amount on local advertising (other than the Grand Opening Obligation), provide a local marketing plan, or participate in, or contribute to, their Advertising Cooperative.

While franchisees may participate in Advertising Cooperatives, Moes Southwest Grill maintains the right to approve all of an Advertising Cooperative's marketing programs and advertising materials. Moes Southwest Grill may terminate or suspend an Advertising Cooperative's program or operations with 30 days written notice to affected franchisees and may form, change, dissolve or merge any Advertising Cooperative. This structure centralizes advertising decisions with Moes Southwest Grill, potentially limiting a franchisee's influence over marketing strategies in their local area.