According to the FDD, what activities are Noodles & Company franchisees restricted to?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(c) Own, maintain, advise, be employed by, consult for, make loans to, operate, engage in or have an ownership interest (including any right to share in revenues or profits) in any Competitive Business which is, or is intended to be located within:
(1) the Protected Area;
(2) a radius of 15 miles from your Noodles & Company Restaurant;
(3) a radius of 15 miles of any Noodles & Company Restaurant; or
(4) any Designated Market Area (as defined by Nielsen Media Research) where a Noodles & Company Restaurant is located.
Your Operating Partner: (a) shall exert full-time and best efforts to the development and operation of your Noodles & Company restaurants and all other Noodles & Company restaurants you own; and (b) may not engage in any other business or activity, directly or indirectly, that requires substantial management responsibility or time commitments or otherwise may conflict with your obligations hereunder.
"Competitive Business" Any business that operates or franchises one of more restaurants: (1) whose sales of Specified Dishes (as defined below) collectively constitute more than 10% of restaurant operating revenues; (2) that are the same as, or substantially similar to, the Noodles & Company concept as it evolves or changes over time; or (3) that operate in a fast casual or quick casual format.
As used in this Agreement, "Specified Dishes" means noodle dishes, pasta dishes, Asian dishes, Italian
or Mediterranean dishes and any other dishes that are the same or substantially similar to the dishes on the Noodles & Company menu ("Noodles & Company Dishes") as it may evolve or change over time. Restrictions in this Agreement on competitive activities do not apply to: (a) the ownership or operation of other Noodles & Company restaurants we or our Affiliates licenses; (b) the ownership of shares of a class of securities that are listed on a public stock exchange or traded on the over-the-counter market and that represent less than 5% of that class of securities; or (c) any restaurant concept whose per person average check during the preceding 12 months was more than 50% higher or lower than Noodles & Company per person average check for the same period.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, franchisees face several restrictions regarding competitive business activities. A "Competitive Business" is defined as any restaurant that operates or franchises one or more restaurants where sales of specific dishes, including noodle, pasta, Asian, Italian, or Mediterranean dishes, constitute more than 10% of the restaurant's operating revenues. This also applies to restaurants that are substantially similar to the Noodles & Company concept or operate in a fast-casual or quick-casual format.
Specifically, franchisees and their owners are restricted from owning, maintaining, advising, being employed by, consulting for, making loans to, operating, engaging in, or having an ownership interest in any Competitive Business within the Protected Area, a 15-mile radius from their Noodles & Company Restaurant, a 15-mile radius of any Noodles & Company Restaurant, or any Designated Market Area where a Noodles & Company Restaurant is located. These restrictions aim to prevent franchisees from directly competing with the Noodles & Company brand and leveraging confidential information gained through the franchise agreement.
However, there are exceptions to these restrictions. Franchisees are permitted to own or operate other Noodles & Company restaurants licensed by Noodles & Company or its affiliates. They can also own less than 5% of a class of securities listed on a public stock exchange or traded over-the-counter. Additionally, the restrictions do not apply to restaurant concepts where the per-person average check is more than 50% higher or lower than the average check at Noodles & Company restaurants during the preceding 12 months. These exceptions provide some flexibility for franchisees to engage in other business ventures that do not directly undermine the Noodles & Company brand.
Furthermore, the Operating Partner of a Noodles & Company franchise is required to exert full-time and best efforts to the development and operation of Noodles & Company restaurants. The Operating Partner is restricted from engaging in any other business or activity that demands substantial management responsibility or time commitments, or that may conflict with the franchisee's obligations under the franchise agreement. This ensures that the Operating Partner's primary focus remains on the success of the Noodles & Company franchise.