pan id="page-17-0">Area Development Agreement.

Under the Area Development Agreement, you must pay a non-refundable development fee of $35,000 for the first Noodles & Company restaurant contemplated to be opened by you and $10,000 for each additional Noodles & Company restaurant you have agreed to open under the Area Development Agreement ("Development Fee"). The Development Fee is payable upon execution of the Area Development Agreement. The number of Noodles & Company restaurants that you may develop under a particular Area Development Agreement is determined by mutual agreement (with a minimum 3 restaurant commitment). The number of Noodles & Company restaurants we agree that you may develop will depend on a variety of factors, including: (1) the existing population and anticipated population growth within the Development Area; (2) competition within the Development Area; (3) the availability of acceptable locations; and (4) the number of Noodles & Company restaurants we estimate can be developed within the Development Area.

The Development Fee is uniform for all franchisees, no portion of the Development Fee is refundable, and, except as provided below, the Development Fee is not credited against any other fees.

Franchise Agreement.

The Franchise Fee is $35,000 per restaurant. The Franchise Fee is due on the first to occur of: (1) the commencement of construction; (2) execution of the Franchise Agreement; or (3) the date the franchised restaurant is required to be opened under the Area Development Agreement. The $35,000 Development Fee paid for the first Noodles & Company restaurant you are required to develop will be credited against the Franchise Fee due to us under the Franchise Agreement for that restaurant. For each additional Noodles & Company restaurant you are required to develop under the Area Development Agreement, the $10,000 Development Fee for each restaurant will be credited against the Franchise Fee due to us under the Franchise Agreement for that restaurant, leaving a balance of $25,000. These credits will only be applied if the total Development Fee due for all Noodles & Company restaurants you are required to develop under the Area Development Agreement was timely and fully paid. Except for the credits described above, and in the case of a sale of a Company-owned Restaurant, operation in a Non-Traditional Venue or joint venture, if any (see Item 1), the $35,000 Franchise Fee is uniform to all Area Operators currently purchasing a franchise.

No portion of the Franchise Fee is refundable.

Purchase of Existing Restaurant

If you are purchasing an existing company-operated restaurant the amount of the purchase price will vary by restaurant based on a wide range of factors, including the assets being acquired, their location, their book value, their fair market value and other factors. The purchase price will be separately negotiated for each restaurant.

Source: Item 5 — INITIAL FEES (FDD page 18)