For Moes Southwest Grill, what are the two options for calculating the 'Allowed Adjustment' for fee increases?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- For any fee that may be increased by no more than the Allowed Adjustment, the "Allowed Adjustment" in any calendar year will not exceed, at our option, (a) 50% of the fee that is in effect at the start of the calendar year or (b) the increase in the actual costs and expenses that we or our affiliates incur to provide such goods or services to you.
Source: Item 6 — Other Fees (FDD pages 30–41)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, certain fees can be increased annually, but the increase is limited to an 'Allowed Adjustment.' Moe's Southwest Grill has the option to calculate this adjustment in one of two ways.
The first option is that the 'Allowed Adjustment' will not exceed 50% of the fee that was in effect at the start of the calendar year. For example, if a fee was $100 at the beginning of the year, the maximum increase under this option would be $50, regardless of any other factors.
The second option allows Moe's Southwest Grill to base the adjustment on the actual increase in costs and expenses that they or their affiliates incur to provide the goods or services associated with the fee. This means that if their costs to provide a service increase, they can pass those increased costs on to the franchisee, but the increase is limited to the actual cost increase they experience.