Which items in the Noodles & Company Disclosure Document relate to franchisee fees?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
collateral assignments of
leases, Principal Owner guarantees and other related documents) that we then customarily use in granting franchises for the operation of Noodles & Company restaurants in the state in which the Noodles & Company restaurant is to be located ("the Franchise Agreement") subject to the following terms and conditions.
- (a) The Franchise Agreement and all ancillary documents must be executed by you and your Owners and returned to us not earlier than five days and not later than 30 days after signing a lease for a Noodles & Company premises or when construction begins, whichever first occurs. If we do not receive the fully executed Franchise Agreement and payment of the Franchise Fee as required hereunder, we may revoke our offer to grant you a franchise to operate a Noodles & Company restaurant at the proposed site and may revoke our acceptance of the proposed site.
- (b) The Development Fee shall be $10,000.00 per restaurant listed on Exhibit A for each restaurant, except the Development Fee for the first restaurant developed pursuant to this Agreement shall be $35,000. All Development Fees must be paid in full on or before the day we execute this Agreement. See Exhibit A for the total amount due upon execution of this Agreement. You acknowledge and agree that no portion of the Development Fee shall be refundable for any Noodles & Company restaurants that you have failed (for any reason or no reason) to develop in accordance with the terms of this Agreement. The Development Fee and each Franchise Fee is fully earned by Noodles & Company at such time it is paid.
- (c) The Franchise Fee payable for each Noodles & Company restaurant required to be developed by Area Operator pursuant to this Agreement shall be $35,000.00, payable in accordance with the payment requirements of this Agreement and the Franchise Agreement. The Franchise Fee for the first restaurant shall be deemed paid when the Development Fee is paid in full. Additionally, for each subsequent restaurant, the first $10,000 of the Franchise Fee for such restaurants shall be deemed paid when the Development Fee is paid in full. The balance of the Franchise Fee shall be payable in accordance with the due date set forth in the Franchise Agreement, except as set forth in Section 3.04(e). You acknowledge and agree that no portion of the Development Fee shall be refundable for any Noodles & Company restaurants that you have failed (for any reason or no reason) to develop or open in accordance with the terms of this Agreement and the Franchise Fee or Franchise Agreement. The Development Fee and each Franchise Fee is fully earned by Noodles & Company at such time it is paid; and
- (d) The Royalty Fees shall not exceed the percentage set forth in our standard form Franchise Agreement being offered as of the date of this Agreement.
- (e) Notwithstanding anything to the contrary in the Franchise Agreement, the Franchise Fee for a restaurant to be developed hereunder must be paid by the Required Opening Date as set forth in Exhibit A, regardless of whether the Franchise Agreement for the restaurant has been signed or the restaurant is open for operation or under construction.
Source: Item 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 33–35)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, Item 6 and Item 23 relate to franchisee fees. Item 23 discusses the Development Fee and Franchise Fee. The Development Fee is $10,000 per restaurant listed on Exhibit A, except for the first restaurant, which has a Development Fee of $35,000. All Development Fees must be paid when the agreement is executed, and no portion of the Development Fee is refundable for restaurants not developed. The Franchise Fee is $35,000 per restaurant, with the first $10,000 of the Franchise Fee for subsequent restaurants being deemed paid when the Development Fee is paid. The balance of the Franchise Fee is payable as set forth in the Franchise Agreement.
Item 6 outlines other fees that a Noodles & Company franchisee may encounter. Noodles & Company may reduce the royalty fee or offer a development incentive based on factors such as the number of Franchised Restaurants developed, acceleration of development patterns, development in a new territory, or unique sites. Currently, franchisees do not pay an Advertising & Brand Development Fund (ABDF) fee, but Noodles & Company reserves the right to collect this fee in the future. Franchisees must also contribute to the Field Marketing Fund (FMF) and may be required to provide documentation of their FMF spending. If the required FMF is not spent, Noodles & Company may collect the funds and spend them on Field Marketing on the franchisee's behalf. Noodles & Company may also organize advertising cooperatives in the future, requiring franchisees to contribute.
These fees are standard in the franchise industry, but the specifics can vary widely. It is important for prospective franchisees to carefully review these sections of the FDD and discuss any questions or concerns with Noodles & Company to fully understand the financial obligations involved in owning a franchise.