Under what circumstances will Moes Southwest Grill charge a fee for insufficient funds?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
ic funds transfer or draft, wire transfer, or other forms of funds transfer. We also reserve the right to change the due dates or frequency of the due dates of the amounts that you owe to us under this Agreement. We will notify you when we change the location for payments, the required payment delivery method, the due dates, or the frequency of the due dates for payments. You must comply with any new or additional procedures as we may specify in the Manuals or otherwise, in writing, and/or perform any acts and sign and deliver any documents we designate as necessary to assist in accomplishing payment by the method that we specify within 30 days of our notice to you. If there are insufficient funds in your account to cover our draft, we will charge you a fee that will not exceed 110% of our or our affiliates' actual costs and expenses related to the incident (including any bank return fees or other charges).
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, if a franchisee has insufficient funds in their account to cover a draft initiated by Moe's Southwest Grill, the franchisee will be charged a fee. This fee will not exceed 110% of Moe's Southwest Grill's or their affiliates' actual costs and expenses related to the incident. This includes any bank return fees or other charges incurred as a result of the insufficient funds.
This policy is in place to cover the administrative and financial burdens that Moe's Southwest Grill incurs when a franchisee's payment is rejected due to insufficient funds. The fee is intended to compensate Moe's Southwest Grill for the direct costs they experience, such as bank charges and the time spent resolving the payment issue. The 110% cap ensures that the fee remains reasonable and directly tied to the actual expenses incurred.
Furthermore, the FDD states that franchisees are responsible for maintaining sufficient funds in their designated bank account to cover all Comprehensive Support Fees and any amounts drafted by EFT (Electronic Funds Transfer) under the Franchise Agreement and the Manuals. If funds are insufficient, Moe's Southwest Grill reserves the right to charge the franchisee the return costs charged by the franchisor's bank, along with an administrative fee to cover the franchisor's and/or company's cost of addressing the nonpayment. This administrative fee is in addition to any interest on the amount due.
Prospective franchisees should be aware of these potential fees and ensure they maintain adequate funds in their accounts to avoid these charges. It is also important to understand the reporting and payment obligations outlined in the Franchise Agreement to prevent any unintentional overdrafts or late payment issues. Franchisees in Minnesota should also note that the insufficient funds fee may be capped at $30 due to state law.