For Noodles & Company, does a failure to have sufficient funds available in the designated account constitute a default of all other agreements between the franchisee and Noodles & Company?

According to Noodles & Company's 2025 Franchise Disclosure Document, failing to have enough funds in the designated account to cover payments due is a serious breach that can trigger multiple consequences. Specifically, it constitutes grounds for terminating the Franchise Agreement and also triggers a default across all other agreements between the franchisee and Noodles & Company. This means that if a franchisee fails to maintain sufficient funds, Noodles & Company can terminate not only the franchise agreement but also any other agreements in place.

Section 6.04 of the FDD outlines the requirement for franchisees to establish a designated bank account from which Noodles & Company is authorized to withdraw amounts due, including Royalty Fees and Marketing Funds. The franchisee is responsible for maintaining sufficient funds in this account to cover these "Sweeps," and failure to do so is considered a material breach of the agreement.

Section 6.05 further clarifies that not having sufficient funds available in the designated account, or failing to pay amounts when due, provides grounds for termination of the agreement. It also explicitly states that such a failure constitutes a default of all other agreements between the franchisee and Noodles & Company, potentially leading to their termination as well. This provision underscores the importance of franchisees carefully managing their finances and ensuring timely payments to avoid jeopardizing their entire relationship with Noodles & Company.