Following the termination or expiration of the Noodles & Company Franchise Agreement, for how long is the franchisee restricted from diverting business from any Noodles & Company Restaurant?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
For a continuous uninterrupted period commencing upon the expiration or termination of this Agreement and for two years thereafter, you shall not, without Noodles & Company's prior written consent, either directory or indirectly, for yourself, or through, on behalf of, or in conjunction with any person, persons, partnership, limited liability company, or corporation:
- (a) Divert or attempt to divert any business or customer of any Noodles & Company Restaurant to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with Noodles & Company's Marks or the System.
- (b) [Intentionally omitted]
- (c) Own, maintain, advise, be employed by, consult for, make loans to, operate, engage in or have an ownership interest (including any right to share in
revenues or profits) in any Competitive Business which is, or is intended to be located within:
(1) the Protected Area;
(2) a radius of 15 miles from your Noodles & Company Restaurant;
(3) a radius of 15 miles of any Noodles & Company Restaurant; or
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, franchisees and their owners are restricted from diverting business from any Noodles & Company restaurant for a period of two years after the expiration or termination of the Franchise Agreement. This restriction applies unless Noodles & Company provides prior written consent. This prevents former franchisees from leveraging their knowledge and experience to unfairly compete with the Noodles & Company system.
Specifically, the franchisee and their owners cannot directly or indirectly divert or attempt to divert any business or customer of any Noodles & Company Restaurant to any competitor. This includes any action that could be considered injurious or prejudicial to the goodwill associated with Noodles & Company's Marks or the System. This restriction is in place to protect the brand and its established customer base.
Additionally, during this two-year period, the franchisee and their owners are restricted from owning, maintaining, advising, being employed by, consulting for, making loans to, operating, engaging in, or having an ownership interest in any Competitive Business. This restriction applies if the competitive business is located within the Protected Area, within a 15-mile radius of the former Noodles & Company Restaurant, within a 15-mile radius of any Noodles & Company Restaurant, or within any Designated Market Area where a Noodles & Company Restaurant is located. However, these obligations do not apply after the second anniversary of when the franchisee or their owners cease to have an ownership interest or render services to the Franchisee.
This post-term covenant is a standard practice in franchising to protect the brand and prevent unfair competition from former franchisees. However, Noodles & Company acknowledges that franchisees possess general skills and the opportunity to use those skills in other ways, so the enforcement of these covenants is not intended to deprive anyone of their personal goodwill or ability to earn a living.