Can the Advertising and Brand Development Funds (ABDF) run at a surplus or deficit for Noodles & Company?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
The ABDF will be accounted for separately from our other funds. While our intent is to balance the ABDF on an annual basis, the ABDF may run at either a surplus or deficit. All disbursements from the ABDF will be made first from income, then from rebates received from suppliers and then from contributions. We may spend, in any fiscal year, an amount greater or less than the aggregate contributions of all Noodles & Company restaurants to the ABDF in that year, and the ABDF may borrow from us or other lenders to cover deficits in the ABDF or cause the ABDF to invest any surplus for future use by the ABDF. We will prepare annually an unaudited statement of monies collected and costs incurred by the ABDF and furnish you a copy upon your request. Except as otherwise expressly provided in the Franchise Agreement, we assume no direct or indirect liability or obligation regarding the maintenance, direction or administration of the ABDF. We do not act as a trustee or in any other fiduciary capacity regarding the ABDF.
Source: Item 11 — FRANCHISOR'S ASSISTANCE, ADVERTISING, COMPUTER SYSTEMS AND TRAINING (FDD pages 36–48)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the Advertising and Brand Development Fund (ABDF) can operate with either a surplus or a deficit. While Noodles & Company intends to balance the ABDF annually, the document states that the fund may run at either a surplus or a deficit. This means that in some years, the ABDF may collect more in contributions than it spends, while in other years, it may spend more than it collects.
Noodles & Company has the right to borrow from lenders, including themselves, to cover deficits in the ABDF. Conversely, Noodles & Company can invest any surplus for future use by the ABDF. This provides Noodles & Company with flexibility in managing the ABDF and ensuring that sufficient funds are available for advertising and brand development activities, even if contributions fluctuate from year to year.
For a prospective franchisee, this means that the level of advertising and marketing support may vary from year to year, depending on the financial status of the ABDF. While Noodles & Company aims to provide consistent support, franchisees should be aware that the ABDF's financial performance could impact the scope and reach of marketing initiatives. Franchisees can request a copy of the ABDF's annual unaudited statement of monies collected and costs incurred to stay informed about the fund's financial status.