How does Moes Southwest Grill use the Freestyle Operations Fund?
Moes_Southwest_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
- 3. FUNDING: If Customer receives equipment leased without charge or free service under the Agreement, Company will create a fund ("Freestyle Operations Fund") for each installed Freestyle Dispenser. The amount of the Freestyle Operations Fund is set forth in Exhibit 5-2. The Freestyle Operations Fund (a) will be controlled by Company, (b) will be earned on a pro rata basis; and (c) will only be applied against any Program Fees that may be due but not as a discount off the Program Fee and will not reduce any sales tax associated with the Program Fee.
- Customer Initials 4. PROGRAM FEE: Customer will pay Company its then current chain account monthly program fee per Freestyle Dispenser ("Program Fee") plus applicable sales tax. The base Program Fee for any particular type of Freestyle Dispenser will not increase during the term of the Agreement above the then current amount for that particular type of Freestyle Dispenser. The base Program Fee includes the rent for the Freestyle equipment and mechanical reactive service (including parts and, if a Freestyle Dispenser cannot be repaired in the reasonable judgment of Company, the replacement of the Freestyle Dispenser), standard wireless connectivity and standard consumption data. Company agrees that it will offer a base Program Fee throughout the Term and that the base Program Fee will provide the basic functionality to operate a Freestyle Dispenser. The Program Fee will be deducted from earned funding or paid
Source: Item 22 — Contracts (FDD page 92)
What This Means (2025 FDD)
According to Moe's Southwest Grill's 2025 Franchise Disclosure Document, the Freestyle Operations Fund is established if a franchisee receives leased equipment without charge or free service for a Freestyle Dispenser. The amount of the fund is detailed in Exhibit 5-2. Moe's Southwest Grill maintains control of this fund, and it is earned on a pro rata basis.
The Freestyle Operations Fund is specifically used to offset any Program Fees that may be due. However, it is important to note that the fund is not applied as a direct discount off the Program Fee itself, nor does it reduce any sales tax associated with the Program Fee. This means the fund can only be used to cover the cost of the Program Fee, not to lower the overall expense or taxes.
Franchisees are required to pay a monthly Program Fee per Freestyle Dispenser, in addition to any applicable sales tax. This fee covers the rent for the Freestyle equipment, mechanical reactive service (including parts and replacement if necessary), standard wireless connectivity, and standard consumption data. Moe's Southwest Grill commits to offering a base Program Fee throughout the term of the agreement, ensuring the basic functionality to operate a Freestyle Dispenser. If the Program Fees exceed the earned funding, the remaining balance will be invoiced or paid using approved payment methods.