What additional costs are associated with the transfer of a Noodles & Company Area Development Agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
rrent standards for approval;
(c) the proposed transferee may not be, or become, an entity, or be, or become, affiliated with an entity, that is a Publicly Held Entity;
(d) the transferee and its owners must agree to be bound by all of the provisions of our then current Area Development Agreement for the remainder of the Term;
(e) the transferee must acquire, in a concurrent transac
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, transferring an Area Development Agreement involves several potential costs. The transferring party or the transferee must pay Noodles & Company a transfer fee. This fee consists of $7,500, plus an additional $3,500 for each Noodles & Company restaurant that has a Franchise Agreement executed or is contemplated by the Area Development Agreement's terms. The transferring party or the transferee is also responsible for covering all costs associated with the transfer itself.
In addition to the transfer fee and associated costs, there may be other financial implications. The transferee must acquire all rights and obligations under agreements related to restaurants not yet developed or operating. Furthermore, if the transferring party financed any part of the sale price, they must agree that their security interests are subordinate to the transferee's obligations to Noodles & Company. The transferee must also obtain an acceptable assignment of leases from each landlord for each Noodles & Company restaurant contemplated by the agreement.
These transfer conditions ensure that Noodles & Company maintains control over who develops and operates their restaurants, and that the transferee is financially capable and committed to fulfilling the development agreement. Prospective franchisees should carefully consider these costs and conditions when evaluating the possibility of transferring their Area Development Agreement.