Besides the Asset Purchase Agreement, what other agreements are executed at the closing of the purchase of a company-operated Noodles & Company restaurant?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
bit C.
If you are interested in purchasing one or more company-operated restaurants that we might make available from time to time, in lieu of the procedure described in the preceding paragraphs, you will first sign a letter of intent regarding the potential purchase. If you wish to review any of our confidential materials in connection with your potential purchase of company-operated Restaurants, you must sign a Confidentiality Agreement. If we agree to sell you one or more company operated restaurants, and you and we agree on the terms of the transaction, you and we will then execute an Asset Purchase Agreement, the general form of which is attached as Exhibit I. At closing, you and we will also execute a Franchise Agreement (as well as applicable addenda thereto that reflect the terms of the Asset Purchase Agreement) for each Restaurant and an ADA pursuant to which you will develop an agreed-upon number of restaurants.
An Area Operator of Noodles & Company will specialize in the sale of noodle dishes, salads, soups, desserts, breads, beverages and other menu items and merchandise related to the Noodles & Company concept as we may authorize in the future. The Noodles & Company restaurants will normally provide in-restaurant and patio seating and delivery and carry-out service. The Noodles & Company restaurants are currently open for lunch and dinner. You must offer for sale all products Noodles & Company designates, unless you obtain our approval not to carry certain items. You may not carry any products that we have not approved.
Source: Item 1 — The Franchisor and any Parents, Predecessors, and Affiliates (FDD pages 10–12)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, in addition to the Asset Purchase Agreement, a franchisee will also execute a Franchise Agreement and an Area Development Agreement (ADA) at the closing of the purchase of a company-operated restaurant. The Franchise Agreement, along with any applicable addenda that reflect the terms of the Asset Purchase Agreement, will be for each restaurant purchased. The ADA will outline the development of an agreed-upon number of restaurants.
This means that when a franchisee purchases an existing Noodles & Company restaurant from the company, they are not only agreeing to the terms of the sale (Asset Purchase Agreement) but also committing to the standard franchise terms and potentially further development in the area. The addenda to the Franchise Agreement are important because they tailor the standard agreement to the specifics of the asset purchase, ensuring that any unique conditions of the sale are incorporated into the franchise terms.
The requirement to sign an ADA in addition to the Franchise Agreement suggests that Noodles & Company prefers franchisees who are willing to expand their presence. This could be a significant financial and operational commitment for the franchisee, as it involves opening additional locations according to a set schedule. Prospective franchisees should carefully consider their capacity to meet the development requirements outlined in the ADA.
It is important to note that the financial and other terms may vary from the standard terms of the Franchise Agreement and ADA depending on the circumstances of the sale. Therefore, a prospective franchisee should carefully review all agreements and seek professional advice to fully understand their obligations and the potential financial implications.