Considering the restrictions on suppliers for Noodles & Company (Item 8), how does this impact the franchisee's ability to respond to customer feedback and preferences?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
testing costs paid by us to third parties.
Other Products and Services.
The reputation and goodwill of Noodles & Company restaurants are based on, and must be maintained by, the sale of distinctive high-quality products, merchandise and services. Therefore, your Noodles & Company restaurant must use and offer for sale only food products, beverages, ingredients, uniforms, packaging materials, menus, forms, labels and other supplies and other products and services that conform to our specifications and quality standards and/or are purchased from suppliers we have approved. Where we have Proprietary Products, you must use the ingredients and products without exception. The list of brands and suppliers are contained in our Noodles & Company Operations Manual, and we may modify that list when we deem necessary in our sole discretion. After notice of a modification, you may not reorder any brand or reorder from any supplier that is no longer approved.
If you propose to use any brand and supplier that is not then approved by us, you must first notify us and submit sufficient information, specifications and samples concerning the brand and supplier so that we can decide whether the brand complies with our specifications and standards and the supplier meets our approved supplier criteria. We have the right to charge reasonable fees to cover our costs. We will notify you of our decision in accordance with the Franchise Agreement. We may prescribe procedures for the submission of requests for approval and impose obligations on suppliers, which we may require to be incorporated in a written agreement. We may impose limits on the number of suppliers and brands for any of the items. We may formulate and modify, at our sole discretion, specifications and standards we impose on franchisees and suppliers. Specifications and standards are issued to franchisees through the Noodles & Company Operations Manual and to suppliers by written agreement.
We attempt to negotiate purchase arrangements with third-party suppliers (including price terms) for the benefit of all Noodles & Company restaurants, including those owned by franchisees. We do not provide material benefits (e.g. renewal or additional franchises) to a franchisee based on use of designated or approved suppliers.
You will be required to purchase IT support services from us. These services, and the related fees, are described in Item 11.
We estimate that the required purchases of Proprietary and Non-Proprietary goods, services, leases, supplies, fixtures, equipment and inventory from Designated
Suppliers and Approved Suppliers will represent between 29% and 45% approximately of all purchases of goods, services, leases, supplies, fixtures, equipment and inventory necessary to open a franchise restaurant and approximately 71% of all such purchases to operate a franchise restaurant. The above goods and services do not include: (1) salaries, wages, payroll taxes and benefits, (2) advertising costs, or (3) depreciation and amortization. This percent assumes average initial construction and opening costs and one year of operation costs.
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, franchisees face restrictions on where they can source products and services, which impacts their ability to respond to customer feedback and preferences. Noodles & Company restaurants must use only food products, beverages, ingredients, uniforms, packaging materials, menus, forms, labels, and other supplies that conform to the franchisor's specifications and quality standards, and/or are purchased from approved suppliers. For Proprietary Products, franchisees must use the specified ingredients and products without exception. This list of approved brands and suppliers is maintained in the Noodles & Company Operations Manual and can be modified at the franchisor's discretion.
A Noodles & Company franchisee who wants to use a brand or supplier not already approved must first seek approval from Noodles & Company by submitting detailed information, specifications, and samples. The franchisor may charge fees to cover the costs of this review process. While Noodles & Company aims to notify franchisees of their decision within 120 days (striving for 60 days), they are not obligated to approve any supplier. The franchisor may consider the effect of the approval on distribution costs and the uniformity of products system-wide. Certain Non-Proprietary Products, like beverages, may be limited to specific brands designated by Noodles & Company.
These restrictions ensure quality and uniformity across all Noodles & Company locations, but they also limit a franchisee's flexibility. If customers express a preference for a different ingredient or product, a franchisee cannot simply switch to a new supplier or brand without going through the approval process. This process can be lengthy and may not result in approval. While franchisees can participate in market research programs and test marketing new products, the ultimate decision on what products are offered rests with Noodles & Company. This centralized control helps maintain brand consistency but reduces the franchisee's autonomy in catering to local tastes and preferences.