Do you want to start a fast food business by buying a Moe’s Franchise? If YES, here is how much it costs to open a Moe’s Franchise and the requirements. If you are looking towards opening a Moe’s Southwest Grill, it will be nice for you to have a preview of what the company represents before going ahead to make enquiries about the total cost of opening the franchise in your location.
Moe’s Southwest Grill was founded in 2000 and they began franchising in 2001, about 19 years ago. The company has her corporate head office at 5620 Glenridge Dr. Atlanta, GA 30342, USA. Moe’s Southwest Grill also provides franchising opportunities and as of 2018, the company operates 714 franchises in the United States and 2 outside the country.
The franchisor is Moe’s Franchisor SPV LLC. The franchisor is a direct, wholly-owned subsidiary of FOCUS Brands Systems LLC. Moe’s Southwest Grill Restaurants are fast casual restaurants featuring southwestern food products and other food and beverage products, which may include alcoholic beverages.
Franchisees conduct business under the service mark “Moe’s Southwest Grill” and any other identifying marks and symbols that are used now, or are later developed by the franchisor, and uses the franchisor’s unique system for the establishment, development and operation of a restaurant. Here are areas where you are expected to spend money and the costs associated with it;
Financial Investment Required to Open Moe’s Franchise
Initial Franchise Fee
You must pay Moe’s an initial franchise fee of $30,000 when you sign your Franchise Agreement. Moe’s will not refund any part of the Initial Franchise Fee paid under the Franchise Agreement. Moe’s participates in the International Franchise Association’s Vet Fran 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, Moe’s may, in its sole discretion, offer a reduced Initial Franchise Fee for each Restaurant that you develop. You must pay Moe’s 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.
Please note that Moe’s may require you to complete a background check as part of the application process. If Moe’s requires this, you may be required to pay it, an affiliate, or a designated Approved Supplier the cost of the background check, which Moe’s estimates will be $80 to $100 per owner.
This fee, 5% of Net Sales, is Payable on or before Friday of each week on the Net Sales for the previous week (or on any other basis stated in the Manuals or in Moe’s written notice to you).
This fee is currently 2% of Net Sales, but it may be increased up to 4% of Net Sales and the Due Date for this fee is Same as Royalty Fee. Please note that you must make advertising contributions to the Ad Fund (the “Advertising Contribution”). Moe’s may increase the Advertising Contribution by notice to franchisees up to 4% of Net Sales at any time.
Advertising Cooperative Contribution
Please note that all members of an Advertising Cooperative, whether a franchisee-owned, company-owned, or affiliate-owned Restaurant, have voting rights on matters brought before the Advertising Cooperative for a vote, including matters relating to the amount of the required Advertising Cooperative contribution. An amount set by your Advertising Cooperative and the Due Date for this fee is Same as Royalty Fee.
Local Marketing Obligation
Each calendar quarter, you must spend not less than 2% of Net Sales on local market advertising and the Due Date for this fee is Each calendar quarter. Amounts you contribute to the Advertising Cooperative will be credited toward your required Local Marketing Obligation.
Please note that if you fail to make the minimum advertising expenditures, Moe’s may do so on your behalf and you must reimburse it for its expenses. Moe’s may also elect to collect all or a portion of the Local Marketing Obligation from you and (i) contribute it to the Ad Fund, (ii) conduct national, regional, or local advertising, (iii) spend it on local advertising, or (iv) contribute it to your Advertising Cooperative.
Costs to purchase, lease, and install all materials necessary for promotional campaigns, including counter cards, posters, banners, signs, photographs, give-away items, and gift cards. Moe’s may charge you its costs plus a reasonable administrative fee. The Due Date is As incurred. Please note that you will participate at your own cost in promotional programs that Moe’s establishes, and the promotional programs will be applicable to the System as a whole or to specific advertising market areas.
EFT NSF FEE
Moe’s out-of-pocket costs and an administrative fee and the Due Date for this fee is On invoice. If Moe’s drafts money from your account under its electronic funds transfer (“EFT”) or draft system, and there are insufficient funds (“NSF”) to cover the draft, it will charge you the return costs charged by its bank and an administrative fee to cover its costs of addressing the nonpayment. Please note that this fee is in addition to interest on the amount due.
1.5% per month or the maximum legal interest rate and the Due Date for this fee is on the invoice. Please note that you must pay Moe’s or its affiliates interest on any amounts past due to it or its affiliates.
Reporting Late Fee
$100 per day and the Due Date for this fee is On invoice. Please note that you must pay this late fee if you fail to submit timely, complete, and accurate reports, financial statements, tax returns, and statements of initial investment costs when due.
Taxes and Other Payments
Moe’s cost and the Due Date for this fee is Within 10 days after demand. Please note that you must pay Moe’s or its affiliates all sales taxes, corporate taxes, and any similar taxes paid by it on your behalf, imposed on it, or required to be collected by it on account of products or services it furnishes to you (through sale, lease, or otherwise), or on account of its collection of any fee related to the Franchise Agreement.
- Subsequent Trainee Initial Training Fee: Currently, up to $500 per trainee and the Due Date for this fee is Before attending training. Please note that You pay this fee only if you appoint a new Primary Contact, Manager, or other employee that Moe’s designates after your Restaurant opens.
- On-Site Training and Assistance: A reasonable fee; currently, $50 per hour per trainer, plus trainers’ travel and living expenses and the Due Date for this fee is On invoice. Please note that at any time, you can request on-site training and assistance above that which Moe’s must provide. Moe’s has no obligation to provide on-site training or assistance.
- Additional Support/Consulting Fee: A reasonable fee; currently, $500 per day, plus travel and living expenses and the Due Date for this fee is On invoice. Please note that Moe’s may offer you consultation services beyond the support services under the Franchise Agreement, and if you accept them, Moe’s can charge you a consulting fee.
- Plan Review Fee: $1,000 per set of drawings and the Due Date for this fee is On invoice. Please note that after Moe’s initial review of your Restaurant plans at no cost and a review of a revision incorporating its comments at no cost, Moe’s may charge a fee of $1,000 for each additional set of drawings it reviews that includes any modifications from the plans that it has previously accepted.
- Conference/Program Fee: A reasonable fee, which will vary by program and the Due Date for this fee is As incurred. Please note that Moe’s may charge you a reasonable fee for any conferences, conventions, programs, or training sessions that it conducts. Moe’s expects these fees to range from $0 to $2,500.
- Training Cancellation Fee: Moe’s out-of-pocket costs and the Due Date for this fee is On invoice. Please note that if you fail to cancel scheduled training at least 14 days prior to such training or if you are not prepared to successfully complete training, Moe’s may charge you the cost of conducting the originally scheduled training (including any travel and living expenses incurred by Moe’s representatives) and may require you to pay an additional fee for rescheduled training.
- Electronic Learning Management System: The then-current fees. Currently, Moe’s estimates the cost will be $500 to $750 annually. The Due Date for this fee is As incurred; payable to Moe’s or third party vendor.
Moe’s may require you to implement an electronic learning management system for manager certification and employee training. Moe’s may require you to pay this fee to it, an affiliate, or a third-party vendor. Note that an electronic learning management system is currently offered for Moe’s Management Training Program and will become mandatory if offered in the future for employee training.
- Relocation: 10% of the then-current Initial Franchise Fee and the Due Date is Before Moe’s signs the relocation Franchise Agreement. Please note that if you relocate to a new site, you must pay the Relocation Fee. If you relocate to a new site and extend the term based on your new lease, you must pay both the Relocation Fee and Lease Renewal Fee.
- Relocation Extension Fee: Another Initial Franchise Fee of $1,500 per year of extension on term and the Due Date for this fee is Before Moe’s signs relocation Franchise Agreement. Please note that if you relocate to a new site and extend the term based on your new lease, you must pay to extend the term.
- Lease Renewal Fee: Moe’s then-current fee. Currently, $2,000 and the Due Date for this fee is As incurred. Please note that Moe’s reserves the right to charge you a fee if you renew your lease or if your lease is extended by a landlord for a period of 12 months.
- Lease Documentation Late Fee: $500 per month (or partial month) until delivered and the Due Date for this fee is As incurred. Please note that Moe’s may charge you this fee if you fail to provide it with a signed copy of any lease or a modification, amendment, or renewal of a lease within 15 days after its execution. The fee is payable for each month or partial month after the deadline, until you provide the documentation.
- Transfer Fee: 50% of the then-current Initial Franchise Fee, if it is a Control Transfer; if it is a transfer to a related party or that is not a Control Transfer, 10% of the then-current Initial Franchise Fee. The Due Date for this fee is At transfer closing. Payable to Moe’s if you transfer any interest in your Franchise Agreement or Store.
A “Control Transfer” occurs if there is a transfer of (i) any interest in the Franchise Agreement, (ii) the Store or substantially all of its assets, (iii) more than 20% of the ownership interests in you, or (iv) any interests that result in a change in control of your entity.
- Renewal Fee: 10% of the then-current Initial Franchise Fee and the Due Date for this fee is Before Moe’s signs renewal Franchise Agreement. Payable to Moe’s if you enter into a renewal term.
- Computer Systems Fee: A reasonable fee, which will vary based on the services provided and the Due Date for this fee is As needed. Paid to contractors, or Moe’s or its affiliates, as applicable. Please note that Moe’s may charge a reasonable systems fee for modifications and enhancements and other maintenance and support services related to the Computer System. The amount for upgrades and maintenance varies based on the extent of the upgrade or services provided.
- POS System Support Fee: Currently, estimated to be between $100 and $250 per month and the Due Date for this fee is As incurred. Please note that you must remit this fee to Moe’s or its affiliate (or a third-party vendor approved by Moe’s) for software and hardware support for your POS System.
- Back Office and Polling Software Fee: Currently, estimated to be between $100 and $200 per month and the Due Date for this fee is As incurred. Please note that you must remit this fee to Moe’s, its affiliate, or a third party vendor that provides the back office and polling software for your Computer System.
- Credit Card Fees: Equipment costs and set up fees estimated to be up to $1,000 per terminal. Transaction fees estimated to be from 2.5% to 5.0% of the transaction amounts. Other fees may apply depending on the vendor used for credit card processing and the Due Date is As incurred.
- Master Insurance Policy Fee: Currently not charged; Moe’s does not have an estimate at this time and the Due Date for this fee is As incurred. Please note that Moe’s reserves the right to obtain a master insurance policy on behalf of the System for certain types of coverage and requires you to pay all or a portion of your proportionate share of coverage under the master policy to Moe’s or its Approved Supplier.
- Information Security and Compliance Fees: Amount of fees; estimated to be between $75 and $125 per month and the Due Date for this fee is As incurred. Please note that You must remit this fee to Moe’s, its affiliate, or a third-party vendor. This fee is subject to change.
- Gift Card and Loyalty Program Fees: Amount of fees and the Due Date for this fee is As incurred. Please note that you must purchase and offer gift cards and loyalty cards (and related equipment) from Moe’s designated gift card and loyalty card vendors, which may include FBRI.
- Purchasing Program Fee: Reasonable membership fees assessed by the Purchasing Program and the Due Date for this fee is As incurred.
If Moe’s designates or establishes any purchasing and/ or distribution cooperatives/ associations/programs (“Purchasing Programs”), you must become a member and pay any membership fees assessed. Please note that Moe’s currently does not have any Purchasing Programs which require membership fees.
- Supply Chain Fee: Currently, $0.25-$0.35 per case purchased through certain Appointed Distributors and the Due Date for this fee is As incurred. Please note that FSC collects this fee from certain Appointed Distributors from whom you may purchase products and services, to offset expenses that FSC incurs managing the supply chain.
- Ordering Support Fee: A reasonable fee, which will vary based on the services provided and the Due Date for this fee is As incurred.
Please note that Moe’s may require you to pay it and/ or one or more third parties that it designates, an ordering support fee, in an amount and at the times that it specifies, for various support services that it will provide or arrange for third parties to provide, such as services related to online and catering ordering platforms, call center(s), third-party ordering and delivery management services, and catering rewards program(s).
- Development Deadline Extension Fee: $2,500 per missed deadline and the Due Date for this fee is On invoice.
Please note that the fee is Payable if you fail to meet the Site Approval Deadline, Construction Start Deadline, or Opening Deadline, or Moe’s grants you an extension to any of these deadlines. Moe’s may terminate the Franchise Agreement if you fail to open by the Opening Deadline or if you fail to cure a default of the Site Approval or Construction Start Deadlines.
- Non-Compliance Fee: Currently, $25 to $500 for a single default, but may vary based on the severity of defaults and repetition of defaults and the Due Date is On invoice. Please note that this fee is Payable if you fail to comply with any of the Standards, in addition to any other remedies that Moe’s is entitled to pursue.
- Failure to Comply with Standards or Law Fee: Up to $5,000, plus Moe’s reasonable expenses connected with any inspection, examination, or analysis of product and the Due Date is On invoice. Please note that this fee is Payable if Moe’s inspection of products shows the products have been adulterated in any way or that your Restaurant does not comply with applicable laws.
- Repeated Inspection Fee: Cost of inspection and the Due Date for this fee is On invoice. Please note that if Moe’s or its representative inspects you as a result of your repeated or continuing failure to comply with any provision of the Franchise Agreement, you must pay Moe’s the cost of the inspection, including the travel and living expenses of its representatives.
- Restrictive Covenant Violation Fee: $2,500 for an hourly employee, $5,000 for an assistant manager, $7,500 for a manager or general manager, and $10,000 for a corporate employee and the Due Date for this fee is On invoice. Please note that this fee is Payable if you hire an employee of Moe’s or its affiliates in violation of your restrictive covenants, in addition to any other remedies Moe’s may be entitled.
- Audit: Cost of audit and the Due Date for this fee is On invoice. Please note that if Moe’s audits you and finds that you understated Net Sales by 2% or more, you must reimburse Moe’s all reasonable expenses connected to the audit, review, or examination (including any reasonable accounting and attorneys’ fees). Moe’s estimates that the typical audit costs would be approximately $1,000 to $4,000.
- Liquidated Damages: The average monthly amount of Royalty that you owed Moe’s during the past 36 months times the lesser of the remainder of the term of the Franchise Agreement or 36 months. The Due Date for this fee is within 30 days of termination of your Franchise Agreement. Please note that you must pay this fee only if the termination occurs after the opening date of your Restaurant and you are not insolvent at the time of termination.
- Appraiser’s Fee: 50% of appraiser’s fee and the Due Date for this fee is On invoice. Please note that you must pay this fee only if Moe’s elects to purchase your assets on termination or expiration of the Franchise Agreement and Moe’s cannot agree with you on the purchase price.
- Indemnification of Moe’s: Moe’s cost and the Due Date for this fee is On invoice. Please note that you indemnify Moe’s from certain losses and expenses under the Franchise Agreement.
- Attorneys’ Fees: Moe’s cost and the Due Date for this fee is On invoice. Please note that you must pay Moe’s any attorneys’ fees it incurs related to you, your Owners, or your Restaurant (other than those Moe’s incurs in response to your efforts to enforce the Franchise Agreement or in the defense of any claim Moe’s asserts against you on which you substantially prevail in court or other formal legal proceedings).
If Moe’s becomes a party to a proceeding on an agreement between Moe’s and you, and Moe’s wins, or if Moe’s become a party to litigation or insolvency proceedings for your franchise, then you must pay Moe’s reasonable attorneys’ fees and court costs. If Moe’s terminates the Franchise Agreement for your default, you must pay Moe’s all its expenses from your default or termination, including reasonable attorneys’ and experts’ fees.
- Reinstatement Fee: 10% of the amount of the then-current Initial Franchise Fee, plus Royalty Fees that would have been payable in period between termination and reinstatement and the Due Date for this fee is Before reinstated. Please note that if Moe’s terminates your Franchise Agreement due to a health and safety default, you cure the default and want to be reinstated, and Moe’s agrees to reinstate your Franchise Agreement, you must pay Moe’s a reinstatement fee.
- De-identification Fee: Moe’s actual costs, plus interest and an administrative fee equal to 15% of Moe’s actual costs and the Due Date for this fee is On invoice. Please note that this fee is Payable if Moe’s terminates the Franchise Agreement, you fail to de-identify the Restaurant, and Moe’s makes the required changes on your behalf.
- Veteran Incentives: This is open for negotiation with the company.
- Term of Agreement and Renewal: The length of the initial franchise term is 20 years. One 20-year renewal term is available if franchisees comply with the franchisor’s renewal requirements.
- Financial Assistance: The franchisor does not offer financing for trade fixtures, opening inventory, or any other purpose. The franchisor may refer franchisees to leasing or financing companies not affiliated with it. The franchisor and its affiliates receive no fees or other financial benefits from any lender for franchisees’ financing. Currently, the franchisor will not guarantee a franchisee’s note, lease, or obligation, for any lender, or any other person or entity.
The franchisor may engage an advisor who will provide consulting services to franchisees to assist them with securing financing and it pays the advisor for this assistance to franchisees. The franchisor participates in the SBA’s Franchise Directory. The franchisor may modify the Franchise Agreement, if necessary, to comply with SBA requirements for the franchisee to participate in certain SBA loan programs.
- Initial Investment: $446,035 – $997,212
- Ongoing Initial Franchise Fee: $30,000
- Ongoing Royalty Fee: 5%
- Ad Royalty Fee: 2%.