What costs and expenses are the franchisee responsible for regarding the designated account for Noodles & Company?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
All costs and expenses of establishing and maintaining such designated account, including transaction fees and wire transfer fees, shall be paid by you. You agree to maintain at all times sufficient funds in such designated bank accounts for such Sweeps and your failure to do so is a material breach of this Agreement. You agree to execute all forms necessary to permit Noodles & Company to accomplish all Sweeps in a timely and efficient manner. You agree not to terminate our right to withdraw funds from the designated account during The Term of this Agreement without our prior written consent.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, franchisees are responsible for all costs and expenses associated with establishing and maintaining the designated bank account. This includes transaction fees and wire transfer fees.
Noodles & Company requires franchisees to establish a designated bank account prior to opening their restaurant. This account is used for Noodles & Company to withdraw amounts due from the franchisee, including Royalty Fees and Marketing Funds, through a process called a "Sweep." Noodles & Company has the authority to Sweep the account at any time, but they agree not to do so more than once each week, provided the Area Operator is not in default of the agreement.
Franchisees must maintain sufficient funds in the designated account to cover these Sweeps. Failure to do so constitutes a material breach of the franchise agreement. The franchisee must also execute all necessary forms to allow Noodles & Company to perform the Sweeps in a timely manner and cannot terminate Noodles & Company's right to withdraw funds without prior written consent during the term of the agreement. This level of control over franchisee finances is common in franchising, allowing franchisors to ensure timely payment of fees.