Under what conditions will the franchisor NOT consent to a Moes Southwest Grill franchise transfer?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
gal or beneficial ownership interests in any Owner that is an Entity, and whether in one transaction or a series of related transactions, regardless of the time period over which these transactions take place. References to a "Controlling Interest" in you mean either (i) 20% or more of the direct or indirect legal or beneficial ownership interests in your Entity or (ii) the acquisition of an ownership interest or other right or interest which grants the power (whether directly or indirectly) to direct or
cause the direction of management and polices of you or the Franchised Business to any individual or Entity, or group of individuals or Entities, that did not have that power before that acquisition.
- 16.2 No Transfer Without Our Consent. This Agreement and the license are personal to you, and we have granted the license in reliance on your (and, if you are an Entity, your Owners') business skill, financial capacity, and personal character. Accordingly, neither you nor any of the Owners or any successors to any part of your interest in this Agreement or the license may make any Transfer or permit any Transfer to occur without obtaining our prior written consent. Any purported Transfer, without our prior written consent, will be null and void and will constitute a default under this Agreement, for which we may terminate this Agreement without opportunity to cure.
- A. Requesting Consent. If you or any of your Owners desire to make a Transfer, you must promptly provide us with written notice. You agree to provide any information and documentation relating to the proposed Transfer that we reasonably require. We have the right to communicate with both you, your counsel, and the proposed transferee on any aspect of a proposed Transfer. No Control Transfer may be completed until at least 60 days after we receive all requested information to evaluate the proposed Control Transfer. No other Transfer may be completed until at least 30 days after we receive all requested information to evaluate such proposed Transfer.
- B. Granting Consent. We have sole and absolute discretion to withhold our consent, except as otherwise provided in Sections 16.4 through 16.7. Without limiting the foregoing, we will not consent to a Transfer, and we are under no obligation to do so, if (i) your Franchised Business is not open and operating; or (ii) the Transfer would cause a transferee or its owners to breach another agreement (whether or not with us). Our consent to a Transfer does not constitute a waiver of any claims that we have against the transferor, nor is it a waiver of our right to demand exact compliance with the terms of this Agreement.
- 16.3 Control Transfer. For a proposed Control Transfer, in addition to any other conditions that we may specify and without limiting in any way our sole and absolute discretion to grant or withhold consent for a proposed Control Transfer, at a minimum, the following conditions must be satisfied (unless waived by us):
- A. You notify us in writing at least 90 days prior to any proposed Control Transfer and provide all requested information at least 60 days prior to any proposed Control Transfer.
- B. All sums you owe us and our affiliates are paid.
- C.
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to the 2025 Moe's Southwest Grill Franchise Disclosure Document, Moe's Franchisor SPV LLC has sole and absolute discretion to withhold consent for a franchise transfer, except as otherwise provided in Sections 16.4 through 16.7 of the franchise agreement. Moe's Southwest Grill will not consent to a transfer if the franchised business is not open and operating, or if the transfer would cause a transferee or its owners to breach another agreement, whether or not with Moe's Southwest Grill.
For a non-control transfer, the franchisee must give Moe's Southwest Grill advance notice and submit copies of all proposed contracts and other information concerning the transfer and transferee that Moe's Southwest Grill may request. Moe's Southwest Grill will have a reasonable time (not less than 30 days) after it has received all requested information to evaluate the proposed transfer. The franchisee and/or its transferee must satisfy the conditions in Sections 16.3.B. (pay all sums owed), 16.3.C. (not in default), 16.3.E. (transferee meets qualifications), 16.3.H. (sign assignment and guaranty), 16.3.I. (sign general release), and 16.3.L. (remain liable for pre-Transfer obligations).
For any transfer that does not result in a control transfer, the franchisee must pay Moe's Southwest Grill a transfer fee equal to 10% of the then-current initial franchise fee. The franchisee and its owners must sign the form of agreement and related documents that Moe's Southwest Grill then specifies to reflect the new ownership structure. Moe's Southwest Grill may withhold its consent on any reasonable grounds or give its consent subject to reasonable conditions.
This means that a Moe's Southwest Grill franchisee needs to ensure their business is in good standing and fully operational if they wish to transfer their franchise. They also need to find a transferee who meets Moe's Southwest Grill's qualifications and is not in breach of any other agreements. The franchisee should also be prepared to pay a transfer fee and remain liable for pre-transfer obligations.