Does the Noodles & Company franchise agreement allow involvement in a Competitive Business within a Designated Market Area where a Noodles & Company Restaurant is located?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(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:
(4) any Designated Market Area (as defined by Nielsen Media Research) where any Noodles & Company Restaurant is located.
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Notwithstanding the foregoing, you will have no obligation under Section 5 or Section 6 after the second anniversary of the later of (a) the date you cease to have an ownership interest in Franchisee or (b) the date you cease to render services to Franchisee.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the franchise agreement restricts franchisees and their owners from involvement in a Competitive Business within a Designated Market Area where a Noodles & Company restaurant is located, both during the term of the franchise agreement and for a period of time after the agreement expires or is terminated.
Specifically, for a period of two years after the termination or expiration of the Franchise Agreement, franchisees and their owners are prohibited from owning, maintaining, advising, being employed by, consulting for, making loans to, operating, engaging in, or having an ownership interest in any Competitive Business located within any Designated Market Area where a Noodles & Company Restaurant is located. This restriction applies without Noodles & Company's prior written consent.
However, these non-compete obligations cease after the second anniversary of the date the franchisee no longer has an ownership interest in the franchise or ceases to provide services to the franchise. The FDD also states that Noodles & Company has the right to reduce the scope of any covenant set forth in the agreement, or any portion thereof, without the franchisee's consent, effective immediately upon written notice to the franchisee.