Is franchisee consent required for Noodles & Company to reduce the scope of a covenant?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.05 Reduction in Scope. You understand and acknowledge that Noodles & Company shall have the right, in its sole discretion, to reduce the scope of any covenant set forth in this Agreement, or any portion thereof, without your consent, effective immediately upon written notice to you. You shall comply forthwith with any covenant as so modified, which shall be fully enforceable notwithstanding the provisions hereof.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, Noodles & Company has the right to reduce the scope of any covenant without the franchisee's consent. This means that Noodles & Company can modify the terms of certain agreements or restrictions placed on the franchisee without needing to obtain their approval. This change becomes effective immediately upon written notice to the franchisee, who is then obligated to comply with the modified covenant.
This provision grants Noodles & Company significant flexibility in adjusting the operational or competitive landscape for its franchisees. For example, if a covenant restricts a franchisee from operating a competing business within a certain radius, Noodles & Company could reduce that radius, potentially allowing the franchisee to engage in activities that were previously prohibited.
While this might seem beneficial in some scenarios, it also carries potential risks for the franchisee. The franchisee must comply with these changes immediately, regardless of their potential impact on their business operations or profitability. It is important for prospective franchisees to carefully consider this clause and understand the potential implications of such unilateral changes by Noodles & Company. Franchisees should seek clarification on what specific covenants are subject to this modification and under what circumstances Noodles & Company might exercise this right.