What document must the buyer of a Noodles & Company franchise enter into at or before closing, in addition to the Franchise Agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
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which Guarantor is a principal operates. Seller's approval of the foregoing business plan and of Guarantor to demonstrate its ability to fulfill its obligations under this Agreement are conditions of Seller to Closing.
- 1.j Bulk Sales Act. It will not be practicable to comply or to attempt to comply with the procedures of the bulk sales or similar laws (if any) of the state in which the Purchased Assets are located on the Closing Date. Accordingly, Seller hereby agrees to defend, indemnify and hold Buyer harmless from and against any and all costs, losses, liabilities, claims and expenses (including reasonable attorneys' fees) arising out of or resulting from the failure of Buyer or Seller to comply with or perform any actions in connection with the provisions of any such law.
- 1.k Franchise Agreements and Development Agreement. At or before Closing, Buyer, as franchisee, shall enter into Seller's current form Franchise Agreement (including any and all Addenda thereto) as set forth in the FDD for each of the Restaurants (each, a "Franchise Agreement" and collectively, the "Franchise Agreements"), each of which agreements will provide for a ____ percent (____%) royalty rate.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, as a condition of closing, the buyer must enter into a Development Agreement with Noodles & Company, in addition to the Franchise Agreement. This Development Agreement will be in substantially the same form as presented in the FDD.
The Development Agreement stipulates that the buyer must develop new Noodles & Company restaurants within a specific Designated Market Area, such as the one described in Exhibit 5.11.2. The number of restaurants and the timeline for their development will be detailed in a development schedule, outlined in Exhibit 5.11.3 or as otherwise agreed upon in writing by both parties.
This requirement ensures that the buyer is committed to expanding the Noodles & Company brand in a defined geographic area, aligning their interests with the franchisor's growth strategy. Prospective franchisees should carefully review the Development Agreement and its associated exhibits to understand the scope of their development obligations and the potential financial implications of meeting the agreed-upon schedule.