Moe’s Southwest Grill
Bottom line
- Total investment $745K – $1.8M including a $31K franchise fee, 5.0% ongoing royalty.
- Average unit revenue of $1.2M/year (median $1.2M).
- Rated STRONG with a risk score of 48/100. SBA loan default rate of 0.0% across 104 loans (below the industry average).
- System contracting at -7.9% CAGR over 3 years. Investigate whether closures are franchisor-driven (consolidation) or franchisee-driven (economics).
Item 1 · who you're contracting with
The Franchisor
Yale framework · single-unit ROIC
Returns Analysis
Pulls Item 7 (investment) and Item 19 (revenue) from this brand's FDD into the Yale unlevered-ROIC formula. Override any input to stress-test it against your own assumptions.
The model · Yale framework
What would one Moe’s Southwest Grill unit return on the cash you put in?
Unlevered ROIC · per unit
14%
Below typical band (30–60%)
Levered LBO scenario · Yale Crease Capital framing
What would 25 Moe’s Southwest Grill units return on equity?
Equity IRR · 5-yr
49.9%
7.57× MOIC
Year-1 DSCR
1.88×
EBITDA ÷ debt service
Equity required
$2.0M
on $9.8M purchase
Total debt
$7.8M
SBA $4.9M + senior + seller note
Overview
About
Franchisees operate Moe's Southwest Grill locations, managing fast-casual restaurant operations that serve customizable Mexican-inspired bowls, burritos, and tacos. Day-to-day responsibilities include food preparation, inventory management, staffing, customer service, and marketing within their protected territory. Franchisees are responsible for lease negotiation, permitting, labor compliance, and achieving the $1.23M average revenue benchmark while paying 5% royalties to the franchisor.
Item 7 · what it costs
The Vitals
Item 19
Financial Performance
Item 20 · unit dynamics
The Growth Chart
Year-over-year franchised unit counts and net change. Source: FDD Item 20.
Item 20 · 8 states with active franchisees
The Territory Map
Derived from franchisee contact records. Shows states with at least one current operator — not where the franchisor is registered to sell new units (that data is re-extracting in a future refresh).
States derived from franchisee phone area codes (Item 20). Approximate — ported numbers may show the original state, not the franchisee's current location.
Government records
SBA Loan Data
Aggregated from SBA 7(a) loan disclosures, public data unique to FranchiseVerdict.
FranchiseVerdict rating + FDD Items 3, 5, 6, 12, 17
Risk & Legal
Moe's presents caution-level risk: declining unit economics, significant franchisor-franchisee litigation, opaque profitability data, and high capital requirements create meaningful downside exposure despite protected territories.
Score breakdown · what drove the 48 / 100 rating
- 01MINORDeclining unit count (-4.7% YoY) indicates system contraction and potential franchisee struggles
- 02HIGHActive litigation with Taylor Investment Partners II involving breach of contract and nonrenewal claims suggests franchisor-franchisee relationship deterioration
- 03MEDNet Income not disclosed in Item 19 prevents ROI validation; only average revenue of $1.23M provided without profitability data
- 04MINORHigh investment range ($745K-$1.82M) requires strong returns, but profitability metrics unavailable for due diligence
- 05HIGH20-year term is lengthy commitment with litigation precedent showing disputes over renewal rights
- 06HIGHTrademark infringement claims in litigation indicate potential brand protection issues affecting franchisee value
Severity inferred from the FDD text · not a regulatory classification
FDD Items 5, 6, 12, 17 · continued from Risk & Legal
Contract & Territory Detail
Item 11
Training & Operations
Item 20
Franchisee Contacts
Phone numbers extracted directly from this brand's FDD Item 20. After purchase, you'll also receive a list of validation questions tailored to this brand.
Franchisee contacts
97 numbers
One-time purchase · CSV download · Validation questions included
FDD download
Moe’s Southwest Grill · FDD (2024) PDF