What condition should the Fixed Assets be maintained in through the Closing Date for Noodles & Company, and what is the exception?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
We shall be entitled to all customary representations and warranties that the Assets are free and clear (or, if not, accurate and complete disclosure) as to: (1) ownership, condition and title; (2) liens and encumbrances; (3) environmental and hazardous substances; and (4) validity of contracts and liabilities inuring to user affecting the Assets, whether contingent or otherwise.
We may exclude from the Assets purchased in accordance with this Section any equipment, vehicles, furnishings, fixtures, signs, and inventory that are not approved as meeting then-current standards for a System Restaurant or for which Area Operator cannot deliver a bill of sale in a form satisfactory to us.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company FDD, if Noodles & Company exercises its option to purchase the assets of a restaurant upon termination or expiration of the franchise agreement, they are entitled to customary representations and warranties that the assets are free and clear. This includes accurate and complete disclosure regarding ownership, condition, and title; liens and encumbrances; environmental and hazardous substances; and the validity of contracts and liabilities affecting the assets.
Specifically, Noodles & Company requires that the assets' condition be accurately disclosed. This means a prospective franchisee should be aware that if Noodles & Company decides to purchase the restaurant's assets, they will expect full transparency regarding the state of those assets.
However, Noodles & Company may exclude from the assets purchased any equipment, vehicles, furnishings, fixtures, signs, and inventory that do not meet the then-current standards for a System Restaurant or for which the Area Operator cannot deliver a satisfactory bill of sale. This implies that franchisees must maintain their restaurant's assets to Noodles & Company's standards to ensure they can be sold back to the company if the option is exercised.