Can Noodles & Company grant licenses to operate Noodles & Company restaurants within the Development Area?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
2. DEVELOPMENT RIGHTS.
2.01 Term and Development Fee. Unless sooner terminated in accordance with Section 8, the term of this Agreement (the "Term") starts on the date hereof and expires on the earlier of the expiration date set forth in Exhibit A or the date upon which Area Operator opens for operation the cumulative number of Noodles & Company restaurants in the Development Area (as such term is defined in Section 2.02 hereof) set forth in Exhibit A. At the time you sign this Agreement, you must pay us the nonrefundable Development Fee ("Development Fee") set forth in Exhibit A.
2.02 Development Rights.
(a) Upon the terms and subject to the conditions of this Agreement, Company hereby grants to Area Operator, and Area Operator hereby accepts, the right and obligation, during the Term (defined below), to develop Noodles & Company Restaurants in the geographic area defined as the Development Area defined below (the "Development Rights"). You shall have no right to subfranchise, sublicense, or otherwise grant sub rights to anyone.
- (b) No right or license is granted to Area Operator hereunder to use any trademarks, trade names, service marks, logotypes, insignias, trade dress, or designs owned by Noodles & Company, such right and license being granted solely pursuant to Franchise Agreements.
Without limiting the generality of the foregoing, nothing in this Agreement shall permit Area Operator to own or operate a Noodles & Company Restaurant, except pursuant to duly executed and substituting Franchise Agreement, and Area Operator shall not use such trademarks, trade names, service marks, logotypes, insignias, trade dress, or designs without the prior express written consent of Noodles & Company.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, if you enter into an Area Development Agreement with Noodles & Company, you, as the Area Operator, receive the right and obligation to develop Noodles & Company restaurants in a specific geographic area, known as the Development Area, during the term of the agreement. However, the agreement explicitly states that you do not have the right to subfranchise, sublicense, or grant sub rights to anyone else.
This means that while you are responsible for developing Noodles & Company restaurants within your designated area, you cannot authorize other parties to open or operate Noodles & Company restaurants within that area. Your rights are limited to developing and operating the restaurants yourself, subject to the terms and conditions outlined in the Area Development Agreement.
Furthermore, the Area Development Agreement does not grant you any rights to use Noodles & Company's trademarks, trade names, service marks, or other intellectual property. These rights are granted solely through individual Franchise Agreements for each restaurant you develop. Therefore, each Noodles & Company restaurant must be operated under a separate Franchise Agreement with Noodles & Company.
In summary, while you secure development rights for a specific area, you cannot delegate those rights to others through sublicensing or subfranchising. Each Noodles & Company restaurant within your Development Area must be directly operated by you under an individual Franchise Agreement granted by Noodles & Company.