What happens to the Noodles & Company contracts for goods or services if they are cancelled by the seller?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- 15.07 Cross-Default.
Except for a default or termination of any Area Development Agreement consisting solely of Area Operator's failure to meet the development schedule thereunder, any material default not timely cured by Area Operator (1) under the terms and conditions of this Agreement, any Lease, or other agreement between Noodles & Company (or its Affiliate) and Area Operator; (2) of its obligations to any advertising Cooperative of which it is a member; (3) under any agreement with any vendor or supplier of Noodles & Company Proprietary or Non-Proprietary Products; (4) under the Lease for the Premises or (5) under any agreement with any construction suppliers, product supplier or service providers, shall be deemed a material default of this Agreement and each and every said agreement.
Furthermore, in the event of termination, for any cause of this Agreement or any other agreement between the parties hereto, Noodles & Company may, at its option, terminate any or all said agreements.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, a material default by an Area Operator under any agreement with any vendor or supplier of Noodles & Company Proprietary or Non-Proprietary Products is considered a material default of the Franchise Agreement itself. This means that if a vendor or supplier cancels a contract with the franchisee due to the franchisee's default, it triggers a default under the Noodles & Company Franchise Agreement.
Furthermore, the FDD states that in the event of termination of the Franchise Agreement, for any cause, Noodles & Company has the option to terminate any or all agreements between the parties. This implies that if a vendor cancels a contract with a Noodles & Company franchisee, and this leads to the termination of the Franchise Agreement, Noodles & Company can then choose to terminate any other agreements they have with the franchisee.
This clause is significant for prospective franchisees because it highlights the interconnectedness of various agreements. A problem with a supplier contract, if serious enough to constitute a default, can have a cascading effect, potentially leading to the termination of the entire franchise agreement and any other agreements in place with Noodles & Company. Franchisees must, therefore, maintain good relationships with their vendors and suppliers and adhere to the terms of those contracts to avoid triggering a default under the Franchise Agreement.