Besides the transfer fee, what other costs are associated with transferring a Noodles & Company franchise?
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 transaction, all of your rights and the rights of your Owners and Affiliates under all agreements between you or your Affiliates and us or our Affiliate, regarding all restaurants contemplated by this agreement not yet developed and/or operating;
(f) you or the transferee must pay us a transfer fee in an amount equal to $7,500, plus $3,500 for each Noodles & Company restaurant for which a Franchise Agreement has been executed, or is contemplated by the terms of this Agreement, plus any transfer fee required by any other agreement between you or your Affiliates and us or our Affiliates and all costs associated with such transfer;
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, in addition to the transfer fee, the transferring franchisee or the new transferee must cover all costs associated with the transfer.
Furthermore, if an audit is made necessary by the franchisee's failure to furnish reports, records, or information on time, or if the audit determines an understatement of Net Royalty Sales for the period of any audit to be greater than 1%, the franchisee must reimburse Noodles & Company for the cost of such audit or inspection. This reimbursement includes charges from attorneys and independent accountants, travel expenses, room and board, and compensation for Noodles & Company employees, attorneys, and independent accountants, plus $3,500 (or the amount in Noodles & Company's then-current Franchise Agreement used for new franchises) to offset their internal costs relating to such audit.
These stipulations ensure that Noodles & Company is compensated for any additional expenses incurred during the transfer process or due to the franchisee's non-compliance. It is important for prospective franchisees to understand these potential costs and ensure they maintain accurate records and comply with reporting requirements to avoid incurring additional expenses during a transfer or audit.