Is the Development Fee paid to Noodles & Company refundable?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
You acknowledge and agree that no portion of the Development Fee shall be refundable for any Noodles & Company restaurants that you have failed (for any reason or no reason) to develop in accordance with the terms of this Agreement.
The Development Fee and each Franchise Fee is fully earned by Noodles & Company at such time it is paid.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company FDD, the Development Fee is generally non-refundable. Specifically, the FDD states that no portion of the Development Fee will be refunded for Noodles & Company restaurants that the franchisee fails to develop, regardless of the reason for the failure. This policy is clearly outlined in Item 23 of the FDD, which addresses receipts and fees.
This non-refundable policy has significant implications for prospective Noodles & Company franchisees. The Development Fee, which is $10,000 per restaurant listed on Exhibit A (except for the first restaurant, which has a $35,000 Development Fee), must be paid in full when the agreement is executed. Since this fee is fully earned by Noodles & Company upon payment, franchisees risk losing this investment if they cannot fulfill their development obligations.
Franchisees should carefully consider their ability to meet the development schedule and obligations outlined in the agreement. Due diligence, including thorough market research and financial planning, is essential to minimize the risk of non-development. Prospective franchisees should also seek legal and financial advice to fully understand the terms and conditions of the Development Agreement and the implications of the non-refundable Development Fee.