What are the consequences if a Noodles & Company franchisee's bank accounts are attached?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
If Area Operator fails to maintain adequate resources in the designated bank account (as described in Section 6.04) to fully and timely satisfy all Sweeps of the account Noodles & Company is permitted to make under this Agreement.
- 15.05 Notice Required By Law.
Notwithstanding anything to the contrary contained in this Section 15, in the event any valid, applicable law of a competent Governmental Authority having jurisdiction over this Agreement and the parties hereto shall limit Noodles & Company's rights of termination hereunder or shall require longer notice periods than those set forth above, this Agreement shall be deemed amended to conform to the minimum notice periods or restrictions upon termination required by such laws and regulations.
Noodles & Company shall not, however, be precluded from contesting the validity, enforceability, or application of such laws or regulations in any action, arbitration, hearing or dispute relating to this Agreement or the termination thereof.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, franchisees are required to maintain a designated bank account for Noodles & Company to withdraw fees. If a Noodles & Company franchisee fails to maintain adequate resources in this designated bank account, it constitutes a default under the franchise agreement.
Specifically, if the franchisee does not have enough funds in the account to cover the amounts Noodles & Company is permitted to withdraw, Noodles & Company can issue a notice of default. The franchisee then has a period of time to correct this deficiency. The length of this period will depend on applicable law or any specific terms Noodles & Company includes in the default notice.
If the franchisee fails to remedy the lack of funds within the specified time frame, the franchise agreement can be automatically terminated without further notice or opportunity to cure the default. This means Noodles & Company can end the agreement, and the franchisee will lose their rights to operate the Noodles & Company restaurant.