What is the expected cost range for an audit by Noodles & Company if a discrepancy is found?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| Interest on late payments | 1.5% per month or the maximum rate allowed by law, whichever is less | Immediately | The interest rate applies to any money you owe us or any of our affiliates after the due date; payment made by electronic withdrawal. |
|---|---|---|---|
| Fees to evaluate and approve alternative suppliers | Our reasonable costs and expenses, which currently are expected to range between $0 and $2,000 per sku, although costs could greatly exceed those amounts depending on the product | Upon receipt of our bill | We may impose reasonable inspections and supervision fees to cover our costs in evaluating and maintaining alternative brands or suppliers you propose in accordance with the Franchise Agreement; payment made by electronic withdrawal. |
| Audit | Cost of audit, which is expected to range between $3,000 and $4,000, if a discrepancy is found in accordance with the Franchise Agreement | Completion of audit | Payable only if you fail to furnish required information or if we find an understatement of Net Royalty Sale |
Source: Item 6 — OTHER FEES (FDD pages 19–22)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, if an audit is conducted and a discrepancy is found, the cost of the audit is expected to range between $3,000 and $4,000. This fee is payable by the franchisee only if they fail to furnish required information or if Noodles & Company finds an understatement of Net Royalty Sales greater than 1.0%.
This means that if a Noodles & Company franchisee is diligent in providing accurate and timely information, they should not incur this audit fee. However, any failure to provide the required information or a significant understatement of sales (greater than 1.0%) will trigger an audit, and the franchisee will be responsible for covering the cost.
It is important for prospective Noodles & Company franchisees to understand the conditions under which this audit fee may be imposed and to ensure they have systems in place to accurately track and report Net Royalty Sales. This will help them avoid potential audit costs and maintain a good financial standing with the franchisor. Payment for the audit is made by electronic withdrawal.