What must a Noodles & Company franchisee do with the proceeds from gift card sales?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Pursuant to our gift card program, each franchisee will provide proceeds from sales of gift cards to Noodles Virginia and will be credited by Noodles Virginia with the face amount of gift cards redeemed at restaurants operated by the franchisee.
Source: Item 8 — RESTRICTIONS ON SOURCES OF PRODUCTS AND SERVICES (FDD pages 28–32)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, franchisees are required to remit the proceeds from gift card sales to Noodles Virginia. Noodles Virginia, a wholly-owned subsidiary of Noodles & Company, manages the gift card program. Franchisees will then be credited by Noodles Virginia for the face value of any gift cards that are redeemed at their specific restaurant locations.
This arrangement centralizes the management of gift card liabilities with Noodles Virginia, ensuring a consistent approach across all Noodles & Company locations. It also simplifies the process for franchisees, as they do not have to independently manage the complexities associated with gift card programs, such as tracking liabilities and compliance with escheat laws.
For a prospective franchisee, this means that while they will collect revenue from gift card sales, they will not retain those funds directly. Instead, they will forward the proceeds and receive credit for redemptions, effectively acting as a point of sale for the gift card program managed by Noodles Virginia. This system ensures that Noodles & Company maintains control over the gift card program and can accurately track and manage the associated financial obligations.