What happens if Noodles & Company disapproves the material terms of the transfer?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- (h) we must not have disapproved the material terms and conditions of such transfer on the basis that they are so burdensome as to be likely, in our reasonable judgment, to adversely affect the transferee's operation of Noodles & Company restaurants or its compliance with its franchise agreements, any area development agreements and any other agreements being transferred;
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, Noodles & Company must not disapprove of the material terms and conditions of a transfer if those terms are not too burdensome. Specifically, Noodles & Company can only disapprove if the terms and conditions of the transfer (including price, payment terms, and financing) are likely to adversely affect the transferee's operation of the Noodles & Company restaurant or their compliance with franchise agreements.
This stipulation protects the franchisee from unreasonable demands during a transfer. It ensures that Noodles & Company cannot arbitrarily block a transfer based on subjective preferences about financial arrangements, but only if the terms would genuinely harm the business.
For a prospective franchisee, this means that the financial terms of a transfer need to be reasonable and sustainable for the buyer. If the terms are deemed too burdensome, Noodles & Company has the right to disapprove the transfer. It is important to ensure that any proposed transfer terms are carefully considered to avoid potential disapproval from Noodles & Company.