For a Noodles & Company franchise, how is the sum payable by the buyer to the seller at closing determined?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
1.l Eminent Domain/Casualty.
(i) If, prior to Closing, any material portion of a Leased or Subleased Property is taken by, becomes subject to proceedings for, or is voluntarily sold under threat of, eminent domain (a "Taking"), such that such property would no longer be reasonably suitable for the operation of a Noodles & Company restaurant, Seller shall notify Buyer thereof and either Buyer or Seller may terminate this Agreement only insofar as it relates to such Leased or Subleased Property upon notice given to the other Party within ten (10) days after such notice of Taking from Seller, and the Purchase Price shall be equitably adjusted as determined by Buyer and Seller. If, following a Taking, neither Buyer nor Seller elects to terminate this Agreement as to such property in accordance with this Section, then: (a) there shall be no reduction of the Purchase Price as a result of such Taking, (b) Seller shall pay to Buyer all proceeds theretofore or thereafter received by Seller with respect to such Taking, (c) Seller shall assign to Buyer all rights of Seller in and to such Taking proceeds, (d) Buyer shall accept such property at Closing in its then present "as is" condition, and (e) in no event shall the Closing be delayed as a result of such Taking. In the event of a Taking of all or a portion of a Subleased Property that results in termination of the Prime Lease for such Subleased Property prior to Closing, then this Agreement shall terminate only insofar as it relates to such
Subleased Property, and the Purchase Price shall be equitably adjusted as determined by Buyer and Seller.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the purchase price for a Noodles & Company franchise can be adjusted under specific circumstances before closing. If a material portion of the leased or subleased property is affected by eminent domain, making it unsuitable for a restaurant, either the buyer or seller can terminate the agreement for that specific property. If this happens, the purchase price will be equitably adjusted as determined by both the buyer and seller.
If neither party chooses to terminate the agreement following such an event, there will be no reduction in the purchase price. Instead, the seller will transfer all proceeds received from the eminent domain action to the buyer, and the buyer must accept the property in its current condition at closing. The closing will not be delayed because of the eminent domain issue.
Additionally, if a subleased property experiences a taking that leads to the termination of the prime lease before closing, the agreement will terminate only for that subleased property, and the purchase price will be equitably adjusted based on mutual agreement between the buyer and seller.