How is the Noodles & Company 'Change Fund' amount determined if it is not the amount specified?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Without any vote and in our sole discretion, we reserve the right to change the requirement for BDF contributions (as well as the requirement for FMF and the MAF contributions) up to an aggregate maximum of 5.5% allocated amongst the funds as we determine is best for the Noodles & Company System. Notwithstanding the above, we also reserve the right to change the aggregate maximum for BDF contributions (as well as the requirement for FMF and the MAF contributions) without regard to the limitation set forth in the preceding sentence, in the
future by gaining an approval vote by 66% of all then-existing Company-owned and franchised Noodles & Company Restaurants. Voting will be accomplished through a system of one vote per eligible Noodles & Company Restaurant. Cooperatives may choose to exceed the minimums established by the Company in accordance with their bylaws.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Noodles & Company may adjust the Brand Development Fund (BDF) contribution requirements. Noodles & Company retains the right to modify the BDF contribution, along with the Field Marketing Funds (FMF) and Marketing and Advertising Fund (MAF) contributions, up to a combined maximum of 5.5% of Net Royalty Sales. This allocation among the funds is determined at Noodles & Company's discretion, based on what they deem best for the Noodles & Company system.
Noodles & Company also reserves the right to change the aggregate maximum for BDF contributions, as well as the requirements for FMF and MAF contributions, without being restricted by the 5.5% limit. However, this requires approval by a vote of 66% of all existing company-owned and franchised Noodles & Company restaurants, with each restaurant having one vote. This mechanism allows for adjustments to the marketing fund contributions based on a consensus between the franchisor and franchisees.
This flexibility in setting the BDF contribution means that a prospective franchisee needs to understand the current contribution rate, how it is being used, and the potential for it to change. They should also consider how much influence franchisees have in these decisions through the voting process. It is important to note that cooperatives may choose to exceed the minimums established by Noodles & Company in accordance with their bylaws.