What costs are associated with the review of an Alternate Approved Supplier for a Noodles & Company franchise?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
You or the proposed distributor or supplier must pay to us in advance all of our reasonably anticipated costs in reviewing the application of the Alternate Approved Supplier and all current and future reasonable costs and expenses, including travel and living costs, related to inspecting, re-inspecting and auditing the Alternate Approved Suppliers' facilities, equipment and food products, and all product testing costs paid by us to third parties.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–32)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, a franchisee must cover all reasonably anticipated costs associated with the review process for an Alternate Approved Supplier. This includes advance payment for all current and future reasonable costs and expenses incurred by Noodles & Company. These expenses specifically include travel and living costs related to inspecting, re-inspecting, and auditing the supplier's facilities, equipment, and food products. Additionally, the franchisee is responsible for all product testing costs that Noodles & Company pays to third parties during the review.
This requirement means that a Noodles & Company franchisee seeking approval for a new supplier must be prepared to front the costs for a comprehensive evaluation. These costs are not capped or estimated in the FDD, so they could vary significantly depending on the location of the proposed supplier, the complexity of the inspection, and the extent of product testing required. The franchisee needs to budget for potential travel expenses, including lodging and meals, for Noodles & Company representatives or qualified third parties conducting the inspection.
The FDD stipulates that Noodles & Company will use good faith efforts to notify the franchisee of their decision within 120 days after receiving product samples and other requested information from the proposed alternative supplier, and will strive to complete the review within 60 days. However, the franchisee remains responsible for covering all associated costs regardless of the review timeline. This places the financial risk of the approval process squarely on the franchisee.
It is important to note that Noodles & Company is not obligated to approve any supplier. The FDD states that it may be disadvantageous to the system to have more than one supplier in a given market area. Therefore, a franchisee should carefully consider the potential benefits of an alternate supplier against the costs of the approval process, with no guarantee of a successful outcome. A prospective franchisee should discuss with Noodles & Company what the typical range of costs has been for other franchisees seeking alternative suppliers.