After the Noodles & Company franchise agreement expires or terminates, for how long is the franchisee restricted from diverting business to a competitor?
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 the 2025 Noodles & Company Franchise Disclosure Document, a franchisee is restricted from diverting business to a competitor for two years after the franchise agreement expires or terminates. Specifically, for a continuous two-year period after the agreement ends, the franchisee and their owners cannot, without Noodles & Company's prior written consent, 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 injurious or prejudicial to the goodwill associated with Noodles & Company's marks or the system.
This restriction applies to several defined geographic areas. These areas include the franchisee's protected area, a 15-mile radius from the franchisee's Noodles & Company Restaurant, a 15-mile radius of any Noodles & Company Restaurant, or any Designated Market Area where a Noodles & Company Restaurant is located. The franchisee is also 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 within these areas.
However, there is an exception to this restriction. The franchisee will have no obligation under these terms after the second anniversary of the later of (a) the date they cease to have an ownership interest in the franchisee or (b) the date they cease to render services to the franchisee. This means that if a franchisee sells their interest in the Noodles & Company franchise or stops working for it, the two-year restriction begins from that later date, providing some flexibility in their future business endeavors.
Noodles & Company emphasizes that franchisees possess general skills and abilities that can be used in other ways, ensuring that the enforcement of these covenants will not deprive them of their personal goodwill or ability to earn a living. This acknowledgement suggests that while the restrictions are in place to protect the Noodles & Company brand, they are not intended to be overly burdensome on the franchisee's future opportunities.