What are the exceptions to Noodles & Company's restriction on operating or licensing other Noodles & Company restaurants within the Development Area?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
authorize you to own or operate a Noodles & Company restaurant. That right is granted under a Franchise Agreement.
During the term of your Area Development Agreement, provided you and your affiliates are in compliance with the Area Development Agreement and all other agreements with us or any of our affiliates (including any Franchise Agreements), we will not operate (directly or through an affiliate), nor license anyone else to operate, any Noodles & Company restaurants located within the Development Area. This restriction does not include: (1) restaurants you operate in the Development Area under other Franchise Agreements with us, (2) Noodles & Company restaurants in your Development Area that are open and operating or under lease, construction or other commitment to open at the time your sign your Area Development Agreement and (3) locations in your Development Area that are Non-Traditional Venues, as described above.
Except for the rights specifically granted to you, we reserve the following rights:
- (1) To operate and license others to operate Noodles & Company restaurants at any location outside of your Development Area.
- (2) To operate and license others to operate Noodles & Company restaurants at any location within your Development Area (other than within the Protected Area for any of your then-operating Noodles & Company restaurants) after the Area Development Agreement terminates or expires.
- (3) To manufacture, distribute and sell products in your Development Area that are the same or similar to products sold in Noodles & Company restaurants using brand names that are similar to or the same as the Marks through any channel of distribution, including, for example, grocery stores, supermarkets, convenience stores, caterers and gas stations.
- (4) To sell products and services to persons located in your Development Area through other channels of distribution including, for example, the Internet, wholesale, mail-order and catalog.
Source: Item 12 — TERRITORY (FDD pages 48–53)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, while the Area Development Agreement generally restricts Noodles & Company from operating or licensing others to operate restaurants within the Development Area, there are specific exceptions. These exceptions include restaurants that the franchisee themselves operate under other Franchise Agreements with Noodles & Company. Additionally, Noodles & Company restaurants that are already open and operating, or are under lease, construction, or other commitment to open when the Area Development Agreement is signed, are also excluded from this restriction. Finally, locations within the Development Area that are considered Non-Traditional Venues are also exceptions to the restriction.
Non-Traditional Venues are defined as locations that are unique and separate in character from typical franchise sites. These venues include transportation facilities like airports and train stations, military bases and government offices, sports facilities such as stadiums and arenas, and amusement parks, zoos, and convention centers. Other examples of Non-Traditional Venues are car and truck rest stops, casinos, food courts, Indian reservations and museums. Noodles & Company reserves the right to develop these locations, either through direct ownership, franchising, or licensing, even if they are within the franchisee's Protected Area and regardless of their proximity to other Noodles & Company restaurants.
These exceptions mean that a Noodles & Company area developer may find themselves in a situation where the franchisor opens another Noodles & Company location within their Development Area. This could occur if the franchisee already operates other Noodles & Company restaurants under separate agreements, if there were pre-existing commitments to open new locations, or if the new location is classified as a Non-Traditional Venue. Prospective franchisees should carefully consider these exceptions and their potential impact on their Development Area when evaluating the Noodles & Company franchise opportunity.