Risk Score
Pending analysis
Investment Range
$624,725 - $1,850,250
Franchise Fee
$10,000
Total US Locations
596
Business Summary
Moe's Southwest Grill Restaurants are fast casual restaurants that serve southwestern food products. Moe's Southwest Grill franchisees operate these restaurants using the Moe's Southwest Grill brand and a proprietary system that includes distinctive designs, approved food and beverage products, proprietary recipes, advertising, training, and technology.
Corporate History
Moe's Franchisor SPV LLC (Moe's Southwest Grill) was organized in Delaware on February 2, 2017. Its predecessors began offering Moe's Southwest Grill franchises in January 2001, and Moe's Southwest Grill itself began offering franchises in April 2017. Moe's Southwest Grill is an indirect, wholly-owned subsidiary of GoTo Foods LLC (formerly Focus Brands LLC), which was originally incorporated in Delaware as Focus Brands Inc. before converting to an LLC on December 29, 2019. Moe's Franchisor LLC (MFL), a predecessor, offered Moe's Southwest Grill franchises from August 2007 to April 2017 and became affiliated with GoTo Foods in April 2007. An affiliate, Moe's Stores LLC, owned and operated five restaurants as of December 31, 2024. GoTo Foods is the indirect parent company to six other franchise systems, including Auntie Anne's, Carvel, Cinnabon, Jamba, McAlister's, and Schlotzsky's, collectively known as the GoTo Foods Portfolio.
Financial Overview
Investment Range
$624,725 - $1,850,250
Franchise Fee (Low)
$10,000
Franchise Fee (High)
$30,500
Royalty %
5%
Marketing %
3%
Equipment Costs (Low)
$250,600
Equipment Costs (High)
$455,800
Working Capital
$39,000
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
The financial statements for both GoTo Foods Systems LLC and its parent GoTo Foods LLC, which Moe's Southwest Grill operates under, received an unqualified opinion from independent certified public accountants. The auditor's reports confirm that the financial statements present the financial position fairly, without any significant concerns or "going concern" qualifications. GoTo Foods Systems LLC has outstanding Senior Notes totaling $1,365,613 as of December 29, 2024, which are secured by intellectual property and franchising assets, and it was in compliance with all associated debt covenants. GoTo Foods LLC also reports compliance with its debt covenants and notes that it believes deferred tax assets, including net operating loss carryforwards, are likely to be realized. Overall, the financial health of the entities backing Moe's Southwest Grill appears stable, with no explicit auditor warnings regarding their ability to continue operations.
Financing Details
Moe's Southwest Grill does not offer any direct or indirect financing to its franchisees for items such as trade fixtures, opening inventory, or other purposes. Franchisees will need to arrange their own funding. While Moe's Southwest Grill may refer prospective franchisees to unaffiliated leasing or financing companies, it does not receive any fees or financial benefits from these referrals and does not guarantee any loans or obligations for franchisees.
Performance Metrics
Total US Locations
596
Franchised Units
591
Corporate Units
5
Avg Square Footage
2,400
Franchising Since
2001
Legal & Compliance Analysis
Recent Litigation
Yes
Bankruptcy
No
Litigation Count
6
Litigation Summary
Moe's Southwest Grill was involved in two lawsuits in 2024 with a franchisee, Taylor Investment Partners II, LLC (TIP). TIP sued Moe's Southwest Grill for contested nonrenewal of its franchise agreement, fraudulent inducement, and breach of good faith. Moe's Southwest Grill denied these allegations and counterclaimed for trademark infringement, unfair competition, and breach of contract. Both lawsuits were settled in August 2024. As part of the settlement, an affiliate of Moe's Southwest Grill purchased TIP's restaurant for $1,800,000, and TIP waived its renewal claim. Additionally, Moe's Franchisor LLC, a predecessor to Moe's Southwest Grill, was involved in a 2016 lawsuit with the same TIP Parties regarding termination of franchise agreements, which was settled in 2019. Moe's Southwest Grill also discloses actions against its affiliates (Arby's and Dunkin') related to "no-poaching" provisions and cyberattacks, which were settled. These actions do not directly involve the Moe's Southwest Grill brand.
Bankruptcy History
Moe's Southwest Grill has no bankruptcy history to report.
Agreement Terms
Initial Term
20 years
Renewal Term
20 years
Renewal Conditions
To renew their franchise agreement for an additional 20-year term, Moe's Southwest Grill franchisees must fulfill several conditions. They need to submit a written renewal request between 6 to 12 months before the initial term expires and complete a renewal application. Franchisees must have maintained substantial and timely compliance with their current franchise agreement and any other agreements with Moe's Southwest Grill or its affiliates, ensuring no existing defaults at the time of renewal. They are required to make significant capital expenditures to complete a remodel of their restaurant within six months of the renewal term's start, adhering to Moe's Southwest Grill's then-current standards. Additionally, franchisees must secure the right to operate at their accepted location for the duration of the renewal term or, if required by Moe's Southwest Grill, relocate the restaurant. Finally, the franchisee and all its guarantors and owners must sign a new franchise agreement, which may have materially different terms, and execute a general release of all claims against Moe's Southwest Grill and its affiliates.
Training & Support Program
Franchisor Assistance
Moe's Southwest Grill provides extensive assistance to its franchisees, starting with pre-opening support. This includes reviewing proposed restaurant locations against minimum site criteria, approving architectural plans, and designating or pre-approving general contractors and architects. Moe's Southwest Grill furnishes specifications for goods, identifies approved suppliers, and grants electronic access to confidential operations manuals and system know-how. Initial management training is provided for two managers at no additional cost for the first two restaurants, covering food safety, station training, service, shift management, administration, retail tech, financials, and marketing, delivered through online modules and at certified training locations. Moe's Southwest Grill also provides on-site opening training and assistance for the first three restaurants. After opening, Moe's Southwest Grill continues to identify approved suppliers, reviews new proposed suppliers and goods, and manages the advertising fund. They provide notices of changes to their standards and operations manuals and review proposed franchisee advertising. Ongoing support services are offered on-site, off-site, by telephone, or through other means, as deemed advisable. Franchisees can request additional on-site training or consulting services, for which a fee is charged. Moe's Southwest Grill also conducts periodic conferences, conventions, programs, webinars, teleconferences, and refresher training sessions, which may be mandatory for key personnel, with associated fees.
Initial Training Hours
200
Training Location
Online modules, certified training locations, or corporate headquarters in Atlanta, Georgia, as specified by Moe's Southwest Grill.
Ongoing Support
Moe's Southwest Grill provides ongoing support to its franchisees after their restaurants open. This includes continuously identifying approved suppliers and reviewing any new suppliers or goods proposed by franchisees. Moe's Southwest Grill also manages the advertising fund, updates standards and operations manuals, and reviews franchisee-developed advertising. Various support services are offered, which can be delivered on-site, remotely via telephone, or through other methods. Franchisees may request additional on-site training or consulting services, incurring a fee of $500 per trainer or representative per day, plus travel and living expenses. Moe's Southwest Grill also conducts periodic conferences, conventions, and refresher training sessions, which may be mandatory for the franchisee's Primary Contact, Managers, Owners, and supervisory personnel. Fees for these additional programs typically range from $0 to $2,500 per attendee. Additionally, Managers are required to re-certify annually through the learning management system.
Franchise Requirements
Ideal Candidate Profile
Moe's Southwest Grill seeks candidates who successfully pass a financial credit check, a basic English language competency test, an operations interview, and a criminal background check as part of the application process. The primary contact for the franchise, who is responsible for the restaurant's operations and decision-making, must hold at least a 5% direct or indirect ownership interest in the franchisee entity (or have an agreement to achieve this level) and be accepted by Moe's Southwest Grill. Managers, who have day-to-day management responsibilities, are typically required to have six to twelve months of prior restaurant management experience.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
absentee-allowed
Territory Type
limited
Territory Size Requirements
Moe's Southwest Grill grants franchisees a protected territory with limited exclusive rights, referred to as an "Area of Protection." The size and scope of this Area of Protection are determined on a case-by-case basis and are negotiated with the franchisee. Factors considered in determining the size include current and projected market demand, demographics and population, median household income, presence of other businesses, location of competitors, traffic patterns, access and visibility, location of other Restaurants, and the franchisor's future development plans. There is no minimum Area of Protection specified in the FDD. If the exact location is not known at the time of signing, the Area of Protection will be designated once the franchisor accepts a proposed location. The Area of Protection may be defined as a specific mile radius from the Accepted Location, or it may be designated by the franchisor at its sole discretion after the Accepted Location is accepted. This protection does not apply to "Captive Audience Locations" (such as airports, stadiums, or malls) or "Delivery Kitchens" (ghost, dark, or cloud kitchens).
Staffing Notes
Moe's Southwest Grill requires franchisees to appoint a Primary Contact who will be responsible for the restaurant's operations and decision-making, must hold at least a 5% ownership interest, and must complete specified training. Each restaurant must also employ two full-time Managers who have successfully completed the Management Training Program, have day-to-day management responsibility, and provide on-premises supervision. If a franchisee and its affiliates operate four or more restaurants, Moe's Southwest Grill may require one or more additional Managers to serve as a Director of Operations to supervise multiple locations. Managers typically need six to twelve months of restaurant management experience.