Under the Moes Southwest Grill dispensing equipment lease, who retains the title to the Equipment?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
Customer Initials 3. TITLE TO THE EQUIPMENT. Title to the Equipment is, and will at all times remain,
vested in Company. Customer will have no right, title, or interest in or to the Equipment, except the right to quiet use of the Equipment in the ordinary course of its business as provided in this Lease. Customer will execute such title documents, financing statements, fixture filings, certificates and such other instruments and documents as Company will reasonably request to ensure to Company's satisfaction the protection of Company's title to the Equipment and Company's interests and benefits under this Lease. Customer will not transfer, pledge, lease, sell, hypothecate, mortgage, assign or in any other way encumber or dispose of any of the Equipment. THE PARTIES AGREE, AND CUSTOMER WARRANTS, THAT THE EQUIPMENT IS, AND WILL AT ALL TIMES REMAIN, PERSONAL PROPERTY OF COMPANY NOTWITHSTANDING THAT THE EQUIPMENT OR ANY PART THEREOF MAY NOW BE, OR HEREAFTER BECOME, IN ANY MANNER AFFIXED OR ATTACHED TO, OR EMBEDDED IN, OR PERMANENTLY RESTING UPON, REAL PROPERTY OR IMPROVEMENTS ON REAL PROPERTY. Customer may perform ordinary maintenance and repairs to the Equipment as required by this Lease, but will not make any alterations, additions, or improvements to the Equipment without the prior written consent of Company (including using Equipment for merchandising not approved by Company). All parts added to the Equipment through alterations, repairs, additions or improvements will constitute accessions to, and will be considered an item of the Equipment and title to such will immediately vest in Company. Customer agrees that Company may transfer or assign all or any part of Company's right, title and interest in or to any Equipment (in whole or in part) and this Lease, and any amounts due or to become due, to any third party ("Assignee") for any reason. Upon receipt of written notice from Company of such assignment, Customer will perform all its
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 retains the title to the dispensing equipment under the lease agreement. Specifically, the title to the equipment is and will at all times remain vested in the company. The franchisee only has the right to quietly use the equipment in the ordinary course of business.
This means that while a franchisee leases the dispensing equipment to serve beverages, they do not own it. Moe's Southwest Grill retains ownership and the franchisee cannot transfer, pledge, lease, sell, or otherwise encumber the equipment. The franchisee is responsible for performing ordinary maintenance and repairs but cannot make alterations or improvements without prior written consent from Moe's Southwest Grill. Any parts added to the equipment through alterations or repairs become the property of Moe's Southwest Grill.
Furthermore, Moe's Southwest Grill has the right to transfer or assign its rights and title to the equipment to a third party. If this occurs, the franchisee is obligated to fulfill their obligations under the lease to the new assignee, including making payments directly to them if directed. This ensures that Moe's Southwest Grill maintains control over the equipment and can manage its assets as needed, while the franchisee is responsible for the proper use and maintenance of the leased equipment.