For Noodles & Company leased properties, what form will the assignment of each leased property take?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(i) If, prior to Closing, any material portion of a Leased or Subleased Property is taken by, becomes subject to proceedings for, or is voluntarily sold under threat of, eminent domain (a "Taking"), such that such property would no longer be reasonably suitable for the operation of a Noodles & Company restaurant, Seller shall notify Buyer thereof and either Buyer or Seller may terminate this Agreement only insofar as it relates to such Leased or Subleased Property upon notice given to the other Party within ten (10) days after such notice of Taking from Seller, and the Purchase Price shall be equitably adjusted as determined by Buyer and Seller. If, following a Taking, neither Buyer nor Seller elects to terminate this Agreement as to such property in accordance with this Section, then: (a) there shall be no reduction of the Purchase Price as a result of such Taking, (b) Seller shall pay to Buyer all proceeds theretofore or thereafter received by Seller with respect to such Taking, (c) Seller shall assign to Buyer all rights of Seller in and to such Taking proceeds, (d) Buyer shall accept such property at Closing in its then present "as is" condition, and (e) in no event shall the Closing be delayed as a result of such Taking. In the event of a Taking of all or a portion of a Subleased Property that results in termination of the Prime Lease for such Subleased Property prior to Closing, then this Agreement shall terminate only insofar as it relates to such
Subleased Property, and the Purchase Price shall be equitably adjusted as determined by Buyer and Seller.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
The 2025 Noodles & Company Franchise Disclosure Document (FDD) addresses the assignment of leases in the event of eminent domain. If a leased property is subject to eminent domain and is no longer suitable for a Noodles & Company restaurant, either the buyer (presumably Noodles & Company or its assignee) or the seller (the franchisee) can terminate the agreement as it relates to that specific property. In this case, the purchase price will be adjusted accordingly.
However, if neither party chooses to terminate the agreement after the event of eminent domain, the seller must transfer all proceeds from the eminent domain action to the buyer. Additionally, the seller must assign all rights to these proceeds to the buyer. The buyer then accepts the property in its current "as is" condition, and the closing of the sale will not be delayed because of the eminent domain event. If a subleased property's prime lease is terminated due to eminent domain before the closing, the agreement terminates specifically for that subleased property, and the purchase price is adjusted.
Beyond the specific case of eminent domain, the FDD does not provide explicit details on the standard form or process for lease assignment. A prospective franchisee should seek clarification from Noodles & Company regarding the typical procedures and documentation involved in lease assignments under various circumstances, such as the sale of the franchise or transfer to a new franchisee.