Are accounts receivable included as purchased assets in the sale of a Noodles & Company restaurant?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Upon the expiration or termination of this Agreement for any reason, we shall give written notice to Area Operator, within 30 days after the
effective date of termination or expiration, if we intend to exercise our option to purchase from Area Operator some or all of the assets used in the Noodles & Company Restaurant ("Assets"). In the event we have exercised such option we shall have the right to immediately enter and take over operations of the Premises. As used in this Section 15.08, "Assets" shall mean and include, without limitation, leasehold improvements, equipment, vehicles, furnishings, fixtures, signs and inventory (nonperishable products, materials and supplies) used in the Restaurant, any liquor licenses and any other licenses necessary to operate the Premises, and the real estate fee simple or the lease for the Premises. We shall have the unrestricted right to assign this option to purchase the Assets. We shall be entitled to all customary representations and warranties that the Assets are free and clear (or, if not, accurate and complete disclosure) as to: (1) ownership, condition and title; (2) liens and encumbrances; (3) environmental and hazardous substances; and (4) validity of contracts and liabilities inuring to user affecting the Assets, whether contingent or otherwise.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
Based on the 2025 Noodles & Company Franchise Disclosure Document, the document outlines the assets that Noodles & Company has the option to purchase from an Area Operator upon termination or expiration of the franchise agreement. These assets include leasehold improvements, equipment, vehicles, furnishings, fixtures, signs, inventory (nonperishable products, materials, and supplies), liquor licenses, other necessary licenses, and the real estate or lease for the premises.
However, the FDD does not explicitly mention whether "accounts receivable" are included as purchased assets in the sale of a Noodles & Company restaurant. The language specifies tangible assets and licenses but omits any reference to financial assets like accounts receivable.
Therefore, a prospective Noodles & Company franchisee should seek clarification from Noodles & Company regarding whether accounts receivable are considered part of the assets that Noodles & Company may purchase upon termination or expiration of the franchise agreement. This clarification is crucial for understanding the full scope of assets involved in a potential purchase scenario.