What is the interest rate charged by Noodles & Company on late payments?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee | Amount | Due Date | Remarks (1) |
|---|---|---|---|
| Royalty | 5% of Net Royalty Sales (2) (3) | Payable on 1st Monday immediately following each "Reporting Period" (2) | Payment is made by automatic electronic withdrawal. |
| Marketing | |||
| (4)(5)(6) | |||
| Advertising Brand Development Fund ("ABDF") | Currently 0.0% of Net Royalty Sales | ||
| Field Marketing Funds ("FMF") | Currently 1.0% of Net Royalty Sales | Not paid to Noodles & Company. To be spent locally by FAO | |
| Marketing Administration Fee ("MAF") | Currently 1.25% of Net Royalty Sales | Payable on 1st Monday immediately following each "Reporting Period" (2) | Amounts spent locally subject to review and approval by Noodles & Company. Payment is made by automatic electronic withdrawal. |
| Renewal of Franchise | Then-current standard Franchise Fee and our associated costs | Upon grant of successor franchise | |
| Additional Training | To be determined by Noodles & Company | "Additional Training" is training to set up your certified training restaurant and training you request or training we deem you or your personnel need in addition to the training we provide to Area Operator, your 1st Area Operating Partner and the general manager for each of your first two restaurants. | |
| Quality Control Program | The maximum percentage for ABDF, FMF and MAF taken together is 5.5% | Ongoing | Must participate in our then current programs, as amended, at your cost and expense. Payable to us or others as applicable; payment made by electronic withdrawal if to us. |
| Interest on late payments | 1.5% per month or the maximum rate allowed by law, whichever is less | Immediately | The interest rate applies to any money you owe us or any of our affiliates after the due date; payment made by electronic withdrawal. |
Source: Item 6 — OTHER FEES (FDD pages 19–22)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the interest rate charged on late payments is 1.5% per month, or the maximum rate allowed by law, whichever is less. This interest applies to any money a franchisee owes to Noodles & Company or its affiliates after the due date. Payments are to be made via electronic withdrawal.
This means that if a Noodles & Company franchisee is late on any payments owed to the company, they will be charged interest. The rate is capped at the maximum legal rate, ensuring compliance with applicable laws. Franchisees should be aware of this policy and ensure timely payments to avoid incurring these interest charges.
Late fees and interest charges are standard in franchising to encourage timely payments and cover administrative costs associated with collecting overdue amounts. Franchisees should factor in these potential costs when managing their finances and ensure they have sufficient funds to cover all obligations to Noodles & Company.