If transferring my Noodles & Company Area Development Agreement, must I and my owners/affiliates be in compliance with the agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| m. Conditions for our approval of transfer | Section 7.02 | You and your Owners and affiliates must be in compliance with Area Development Agreement; the proposed transferee must be an entity that is not publicly held and meets our qualifications and standards for approval; the proposed transferee must agree to be bound to our then current Area Development Agreement for the remainder of the Development Term; all rights to your not yet developed and/or operating Noodles & Company restaurants must be transferred; transfer fee must be paid; you must sign a general release and non-compete agreement; we must approve price and payment terms; we must waive our right of first refusal; any financing you provide to the proposed transferee must be subordinate to the transferee's obligations to pay amounts due to us; there must have been no change in the law since we entered into the Area Development Agreement that would limit our right as to the proposed transferee; the proposed transferee must obtain assignment of leases from all landlords; after the transfer, the proposed transferee must own the minimum number of restaurants that we require of Area Operators; and you must meet any other reasonable requirements we may impose to protect our rights. |
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Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 63–83)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, if you wish to transfer your Area Development Agreement, you and your owners and affiliates must be in compliance with the existing Area Development Agreement. This requirement is one of several conditions that Noodles & Company stipulates for approving a transfer.
Other conditions include that the proposed transferee must be a non-public entity that meets Noodles & Company's qualifications and standards. The transferee must also agree to adhere to the current Area Development Agreement for the remainder of its term. All rights to undeveloped or operating Noodles & Company restaurants must be transferred as well.
Additionally, a transfer fee must be paid, and you must sign a general release and non-compete agreement. Noodles & Company must also approve the price and payment terms of the transfer and waive their right of first refusal. Any financing you provide to the transferee must be subordinate to their obligations to pay Noodles & Company. The proposed transferee must also obtain assignment of leases from all landlords and own the minimum number of restaurants that Noodles & Company requires of Area Operators. Finally, there must be no changes in the law that would limit Noodles & Company's rights regarding the proposed transferee, and you must meet any other reasonable requirements Noodles & Company imposes to protect their rights.