What does the Noodles & Company buyer agree to accept the properties in at closing?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(i) If, prior to Closing, any material portion of a Leased or Subleased Property is taken by, becomes subject to proceedings for, or is voluntarily sold under threat of, eminent domain (a "Taking"), such that such property would no longer be reasonably suitable for the operation of a Noodles & Company restaurant, Seller shall notify Buyer thereof and either Buyer or Seller may terminate this Agreement only insofar as it relates to such Leased or Subleased Property upon notice given to the other Party within ten (10) days after such notice of Taking from Seller, and the Purchase Price shall be equitably adjusted as determined by Buyer and Seller. If, following a Taking, neither Buyer nor Seller elects to terminate this Agreement as to such property in accordance with this Section, then: (a) there shall be no reduction of the Purchase Price as a result of such Taking, (b) Seller shall pay to Buyer all proceeds theretofore or thereafter received by Seller with respect to such Taking, (c) Seller shall assign to Buyer all rights of Seller in and to such Taking proceeds, (d) Buyer shall accept such property at Closing in its then present "as is" condition, and (e) in no event shall the Closing be delayed as a result of such Taking.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, in the event of a taking by eminent domain or casualty prior to closing, the buyer's obligations depend on whether either party elects to terminate the agreement. If a material portion of a leased or subleased property is affected such that it's no longer suitable for a Noodles & Company restaurant, both the seller and the buyer have the option to terminate the agreement, but only as it relates to the specific property in question. This decision must be made within ten days of the seller notifying the buyer of the taking.
If neither party chooses to terminate the agreement following such an event, the buyer is obligated to proceed with the closing under specific conditions. First, the purchase price will not be reduced as a result of the taking. Second, the seller must pay to the buyer all proceeds received related to the taking, both before and after the closing. Third, the seller must assign all rights to the taking proceeds to the buyer.
Finally, and most importantly to the question, the buyer must accept the property at closing in its then-present "as is" condition. The closing will not be delayed because of the taking. This means the buyer assumes responsibility for the property's condition, including any damages or alterations resulting from the event, at the time of closing. This clause protects the seller from liability related to eminent domain or casualty events, shifting the responsibility and potential risks to the buyer if they choose to proceed with the transaction.