Can Noodles & Company exclude certain competitive businesses from the non-competition clause after termination or expiration?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
For 2 years after termination or expiration and except for a 5.0% or less ownership interest in a publicly traded company, you may not own, or have any legal or beneficial interest in, or render services or give advice to, any competitive business, as described above in q. in any Designated Market Area (as defined by Nielsen Media Research) where any Noodles & Company restaurant is located. Noodles & Company may, in its discretion, exclude from this clause certain competitive businesses approved by Noodles & Company at the time of execution of your Area Development Agreement and Franchise Agreements or approved subsequent to the execution of those agreements.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 63–83)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, Noodles & Company has the discretion to exclude certain competitive businesses from the non-competition clause that applies after the termination or expiration of the franchise agreement. This exclusion can be approved either at the time of the execution of the Area Development Agreement and Franchise Agreements or at a later date.
This provision offers a degree of flexibility for franchisees. It means that a former franchisee might be able to engage with a specific competitive business if Noodles & Company approves it. This could be particularly relevant if a franchisee has specific expertise or a pre-existing relationship with a particular business that would otherwise be considered a competitor.
However, it's important to note that the approval is at Noodles & Company's discretion, and there is no guarantee that a request for exclusion will be granted. A prospective franchisee should seek clarity on what criteria Noodles & Company uses to evaluate such requests and under what circumstances an exclusion might be approved. Understanding this process can help a franchisee make informed decisions about their future business endeavors after leaving the Noodles & Company system.