Are there any limitations on transfer fees that Moes Southwest Grill can collect?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- Item 17, "Renewal, Termination, Transfer and Dispute Resolution," is amended by the addition of the following paragraph at the end of the Item:
Pursuant to Minn. Rule 2860.4400D, any general release of claims a transferor may have against us or our directors, officers, shareholders, and employees, including without limitation claims arising under federal, state, and local laws, rules, and ordinances, excludes claims the transferor may have under the Minnesota Franchises Law or the Rules and Regulations promulgated thereunder by the Minnesota Commissioner of Commerce.
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- The general release required as a condition of renewal, transfer, and sale will not apply to any liability under the Maryland Franchise Registration and Disclosure Law.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, there are some limitations to the fees that Moe's Southwest Grill can collect. Specifically, the Minnesota Department of Commerce stipulates that any general release of claims from a transferor against Moe's Southwest Grill, its directors, officers, shareholders, and employees cannot include claims arising under the Minnesota Franchises Law or its associated rules. This protects the transferor's rights under Minnesota franchise law, ensuring they are not waived during a transfer.
Additionally, for franchisees operating in Maryland, the general release required for renewal, transfer, and sale will not apply to any liability under the Maryland Franchise Registration and Disclosure Law. This ensures that franchisees in Maryland retain their rights and protections under Maryland's franchise laws, even when transferring their franchise.
These stipulations are important for prospective franchisees as they highlight the specific legal protections afforded to franchisees in Minnesota and Maryland during franchise transfers. Franchisees in these states should be aware of these limitations to ensure their rights are protected during any transfer-related transactions. It is important to consult with a legal professional to fully understand the implications of these state-specific regulations.