What happens if Noodles & Company disapproves of the material terms of the transfer of a Noodles & Company franchise?
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 the 2025 Noodles & Company Franchise Disclosure Document, Noodles & Company must not disapprove of the material terms and conditions of a franchise transfer. This includes the price, terms of payment, and financing arrangements. Noodles & Company can only disapprove if, in its reasonable judgment, these terms are so burdensome that they are likely to adversely affect the transferee's operation of the Noodles & Company restaurant or their ability to comply with the franchise agreements.
This provision protects both Noodles & Company and the incoming franchisee. Noodles & Company wants to ensure that the new franchisee is set up for success and won't be burdened by unsustainable financial obligations from the outset. This helps maintain the brand's reputation and the overall health of the franchise system.
For a prospective franchisee, this means that the financial terms of any transfer agreement need to be carefully considered to ensure they are reasonable and sustainable. If Noodles & Company deems the terms too burdensome, the transfer could be blocked. It is important for both the seller and the buyer to negotiate terms that are fair and that allow the new franchisee to operate the Noodles & Company restaurant successfully.