How will Noodles & Company exercise its discretion when making decisions that affect franchisees?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Additionally, if applicable law shall imply such covenant, we and you acknowledge and agree that: (a) this Agreement (and the relationship of the parties which arises from this Agreement) grants us the discretion to make decisions, take actions and/or refrain from taking actions not inconsistent with your explicit rights and obligations hereunder that may affect favorably or adversely your interests; (b) we will use our judgment in exercising such discretion based on our assessment of our own interests and balancing those interests against the interests of the owners of Noodles & Company Restaurants generally (including ourselves, and our Affiliate and other Area Operators), and specifically without considering your individual interests or the individual interests of any other particular Area Operator; (c) we will have no liability to you for the exercise of our discretion in this manner so long as such discretion is not exercised in bad faith toward you; and (d) in the absence of such bad faith, no trier of fact in any legal action or arbitration proceeding shall substitute its judgment for our judgment so exercised.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the Franchise Agreement grants Noodles & Company the authority to make decisions and take actions that could affect a franchisee's interests, either favorably or unfavorably. However, these actions must be consistent with the franchisee's explicit rights and obligations as defined in the agreement.
Noodles & Company will base its decisions on its own interests, balancing them against the collective interests of all Noodles & Company restaurant owners, including its affiliates and other area operators. Importantly, the company will not consider the individual interests of any specific franchisee when making these decisions.
Noodles & Company will not be liable to the franchisee for how it exercises its discretion, provided that it does not act in bad faith. The agreement specifies that, in the absence of bad faith, no third party (such as a judge or arbitrator) can override Noodles & Company's judgment. This clause emphasizes the independence of the contracting parties.