What state's law applies to disputes with Moes Southwest Grill?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provisions | Section in Franchise Agreement | Summary |
|---|---|---|
| f. You pay us a Transfer Fee. g. You and your guarantors and owners must sign h. general release and remain liable for pre-transfer obligations | ||
| n. Our right of first refusal to acquire your business | Section 16.8 of Franchise Agreement | We can match any offer for your Restaurant or substantially all interest in your entity. |
| o. Our option to purchase your business | Section 18.4 of Franchise Agreement | We may purchase your Goods related to the Restaurant at the fair market value (exclusive of good will) and may purchase your Accepted Location if you own it or your interest in any lease. |
| p. Your death or disability | Section 16.6 of Franchise Agreement | Upon 180 days from your death or permanent incapacity you must transfer all rights and interests to buyer that complies with Transfer provisions, except no Transfer Fee will be due. |
| q. Non-competition covenants during the term of the franchise | Section 15.4 of Franchise Agreement | No involvement in a competitive business (generally, similar types of businesses that offer products the same or similar to the Approved Products) anywhere. You may not divert or attempt to divert any business or potential business, misuse vendor relationships, or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with the Proprietary Marks and the System. |
| r. Non-competition covenants after the franchise is terminated or expires | Section 15.4.B. of Franchise Agreement | For 12 months after expiration or termination, no involvement in a competitive business at the Accepted Location, within 3 miles of your Accepted Location, or within 3 miles of any Restaurant; and no diverting or attempting to divert any business from any Restaurant. |
| s. Modification of the agreement | Sections 8.3, 22.2 and 22.3 of Franchise Agreement | No oral modifications, but we can change the Manuals. |
| t. Integration/merger clause | Section 22.2 of Franchise Agreement | Only the terms of the Franchise Agreement and related agreements are binding (subject to state law). Any representations or promises outside of the Disclosure Document and Franchise Agreement may not be enforceable. |
| u. Dispute resolution by arbitration or mediation | Section 19.1 of Franchise Agreement | Most disputes must be resolved by arbitration. |
| v. Choice of forum | Section 19.1 of Franchise Agreement | Subject to state law, currently, arbitration or lawsuit must be in the metropolitan area of district court where our principal place of business is located (currently, Georgia). |
| w. Choice of law | Sections 15.6 | Subject to state law, Georgia law applies to all disputes |
| and 22.5 of | except those related to the non-competition covenants, | |
| Franchise | which will be governed by the laws of the state in which | |
| Agreement | your Restaurant is located. |
Source: Item 17 — Renewal, Termination, Transfer, and Dispute Resolution (FDD pages 77–82)
What This Means (2025 FDD)
According to Moes Southwest Grill's 2025 Franchise Disclosure Document, Georgia law generally applies to disputes. However, there is an exception: disputes related to non-competition covenants are governed by the laws of the state where the franchisee's restaurant is located. This means that if a dispute arises concerning a franchisee's adherence to the non-competition agreement, the laws of the state in which their Moes Southwest Grill restaurant operates will be used to interpret and enforce that specific aspect of the franchise agreement.
This stipulation is important for prospective franchisees because it means the legal landscape for certain disputes can vary significantly depending on the restaurant's location. Non-competition clauses often restrict a franchisee's ability to engage in similar business activities during and after the franchise term, so understanding the specific state laws governing these covenants is crucial. These laws can differ widely in terms of enforceability, scope, and duration of the restrictions.
For example, a franchisee in California might face different legal standards for non-competition than a franchisee in Texas. Franchisees should consult with legal counsel in their respective states to fully understand the implications of the non-competition covenants and how local laws might affect their rights and obligations under the Moes Southwest Grill franchise agreement. This also means that Moes Southwest Grill franchisees need to be aware of the specific non-compete laws in their state, as those laws will take precedence over Georgia law in those specific situations.