FranchiseVerdict
Moe’s Southwest Grill logo
A40/100FDD 2024

Moe’s Southwest Grill — Litigation & Risk

Food & Beverage - Full Service · FDD Items 3, 4 & 5

Back to overview

Moderate — Review

3 cases disclosed in FDD Items 3 and 4.

Source: FDD Items 3–5

FDD Items 3 & 4

Litigation Metrics

Cases disclosed
3
Total from FDD Items 3 and 4
Bankruptcy (Item 4)
—
Franchisor or officer bankruptcy
Overall risk score
40 / 100
FranchiseVerdict composite
Rating
STRONG
STRONG / MODERATE / CAUTION / AVOID

7(a) FOIA data · FY2020–present

SBA Loan Performance

Aggregated from public SBA 7(a) loan disclosures. Default rate is the share of loans that were charged off or settled for less than the full balance.

Total 7(a) loans
104
Government-backed loans issued
Default rate
0.0%
vs <3% typical · system-wide
5-yr default rate
—
Defaults
0 loans
Loans charged off or defaulted

FDD Items 5, 6 & 17 — what you give up

Contract Risk Indicators

Mandatory arbitration
Required
Disputes resolved outside court — limits your legal options
Jury trial waiver
Waived
You give up the right to a jury trial
Non-compete
1 yrs
Post-termination restriction on similar businesses
Franchisor can compete
Yes
Franchisor can open competing locations in or near your territory
Right of first refusal
Yes
Franchisor can match any purchase offer when you try to sell
Governing law
Georgia
State whose law governs disputes — relevant if you're not based there

What drove the 40/100 rating

Risk Score Breakdown

  1. 01MINORDeclining unit count (-4.7% YoY) indicates system contraction and potential franchisee struggles
  2. 02HIGHActive litigation with Taylor Investment Partners II involving breach of contract and nonrenewal claims suggests franchisor-franchisee relationship deterioration
  3. 03MEDNet Income not disclosed in Item 19 prevents ROI validation; only average revenue of $1.23M provided without profitability data
  4. 04MINORHigh investment range ($745K-$1.82M) requires strong returns, but profitability metrics unavailable for due diligence
  5. 05HIGH20-year term is lengthy commitment with litigation precedent showing disputes over renewal rights
  6. 06HIGHTrademark infringement claims in litigation indicate potential brand protection issues affecting franchisee value

Severity inferred from FDD text — not a regulatory or legal classification

Litigation data from FDD Items 3, 4, and 5. SBA data from public 7(a) FOIA records (FY2020–present). Not legal advice — consult a franchise attorney before signing any franchise agreement.