What constitutes repeated defaults that could lead to termination of the Noodles & Company franchise agreement?

According to the 2025 Noodles & Company Franchise Disclosure Document, a franchisee can face termination of their franchise agreement if they default in three or more material obligations within a 12-month period. These defaults do not need to be the same or identical breaches to qualify as repeated defaults. Noodles & Company must provide written notice for these defaults, if required, or no notice if none was required. This repeated course of conduct is grounds for termination without further notice or opportunity to cure the defaults.

This clause means that Noodles & Company franchisees must maintain consistent compliance with all aspects of the franchise agreement. Even if a franchisee corrects individual defaults, a pattern of multiple defaults within a year can lead to termination. The FDD specifies that each of the listed defaults (a) through (q) are material breaches and material defaults.

For a prospective Noodles & Company franchisee, this highlights the importance of understanding and adhering to all requirements outlined in the franchise agreement and operations manual. It also emphasizes the need for strong management and operational systems to prevent recurring issues. The franchisee should ensure they have systems in place to track and address any potential defaults promptly to avoid repeated defaults within the specified timeframe, which could lead to the loss of their franchise.

It is important to note that the specific definition of what constitutes a 'material obligation' is not exhaustively detailed in this section, but is referenced throughout the document. A prospective franchisee should seek clarification from Noodles & Company regarding what they consider to be material obligations and examples of situations that could trigger this clause.