Under what circumstances might the initial franchise fee be reduced for a Moes Southwest Grill franchise?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
losed in this Item.
ITEM 5
INITIAL FEES
Initial Franchise Fee. When you sign your Franchise Agreement you must pay us an initial franchise fee (the "Initial Franchise Fee") of $30,500. We will not refund any part of the Initial Franchise Fee paid under the Franchise Agreement.
We reserve the right to reduce the Initial Franchise Fee under certain circumstances, including: (i) as an economic incentive for a franchisee to open a certain location, with the determination made on a case-by-case review of all relevant economic factors; (ii) as an inducement for existing operators to open additional Restaurants; (iii) as an inducement for someone to reopen a closed Restaurant; (iv) as an inducement for someone to take over an operating Restaurant; (v) as an inducement for a professional multi-unit operator to open several Restaurants; or (vi) to allow a franchisee to have additional money to spend on restaurant improvements and marketing during the first 12 months of operation. The amount of any reduction will be made on an individual basis and may depend on the condition of the premises, the need for upgrades and remodeling, any special circumstances that we may consider appropriate, and/or other considerations. In addition, we may allow a new franchisee to apply part of their Initial Franchise Fee to the cost of needed improvements or equipment. We may modify or cease offering any discount or incentive programs at any time.
We participate in the International Franchise Association's VetFran program. For qualifying veterans or members of the Armed Forces, the Initial Franchise Fee is $20,000.
If you sign multiple Franchise Agreements at the same time with a Multi-Unit Addendum to develop a set number of Restaurants, we may, in our sole discretion, offer a reduced Initial Franchise Fee for each Restaurant that you develop. You must pay us all of the Initial Franchise Fees for all of the Restaurants that you commit to develop at the time you sign the Franchise Agreements with a Multi-Unit Addendum. If you fail to develop any of the Restaurants by the
deadlines set forth therein or any Franchise Agreement(s) subject to the Multi-Unit Addendum are terminated, you will not receive a refund of any Initial Franchise Fees that you have prepaid.
During the 2024 calendar year, franchisees paid Initial Franchise Fees ranging from $10,000 to $30,500.
Source: Item 5 — Initial Fees (FDD pages 28–30)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the standard initial franchise fee is $30,500; however, the document outlines several circumstances under which Moe's Southwest Grill may reduce this fee. These include offering economic incentives to open in specific locations based on economic factors, inducing existing operators to open additional restaurants, encouraging the reopening of closed restaurants, incentivizing the takeover of operating restaurants, attracting professional multi-unit operators to open multiple locations, or providing franchisees with additional funds for restaurant improvements and marketing during their first year. The amount of any reduction is determined on a case-by-case basis, considering factors such as the condition of the premises, the need for upgrades, and any special circumstances. Moe's Southwest Grill may also allow new franchisees to apply part of their initial franchise fee towards the cost of necessary improvements or equipment.
Additionally, Moe's Southwest Grill participates in the International Franchise Association's VetFran program, offering a reduced initial franchise fee of $20,000 for qualifying veterans or members of the Armed Forces. For franchisees who sign multiple franchise agreements with a Multi-Unit Addendum to develop a set number of restaurants, Moe's Southwest Grill may offer a reduced initial franchise fee for each restaurant developed, at their discretion. It is important to note that these initial franchise fees are generally non-refundable, even if the franchisee fails to meet the development deadlines outlined in the Multi-Unit Addendum or if the franchise agreements are terminated.
During the 2024 calendar year, the initial franchise fees paid by franchisees ranged from $10,000 to $30,500, indicating that fee reductions are not uncommon. Furthermore, in certain rare cases, Moe's Southwest Grill may permit installment payments of the initial franchise fee, with terms negotiated individually with the franchisee. These potential reductions and alternative payment options can significantly lower the initial investment required to open a Moe's Southwest Grill franchise, making it more accessible to a wider range of potential franchisees.