For how long after the Noodles & Company franchise agreement expires or terminates are franchisees prohibited from diverting business or customers to a competitor?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
For a continuous uninterrupted period commencing upon the expiration or termination of this Agreement and for two years thereafter, you shall not, without Noodles & Company's prior written consent, either directory or indirectly, for yourself, or through, on behalf of, or in conjunction with any person, persons, partnership, limited liability company, or corporation:
- (a) Divert or attempt to divert any business or customer of any Noodles & Company Restaurant to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with Noodles & Company's Marks or the System.
- (b) [Intentionally omitted]
- (c) Own, maintain, advise, be employed by, consult for, make loans to, operate, engage in or have an ownership interest (including any right to share in
revenues or profits) in any Competitive Business which is, or is intended to be located within:
(1) the Protected Area;
(2) a radius of 15 miles from your Noodles & Company Restaurant;
(3) a radius of 15 miles of any Noodles & Company Restaurant; or
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, both the franchisee and their owners are restricted from diverting business or customers to a competitor for a period of two years after the franchise agreement expires or terminates. This restriction applies unless Noodles & Company provides prior written consent. This prevents franchisees from leveraging their knowledge and experience gained while operating a Noodles & Company restaurant to unfairly compete immediately after leaving the system.
Specifically, this post-term covenant prevents franchisees and their owners from directly or indirectly diverting or attempting to divert any business or customer of any Noodles & Company Restaurant to any competitor. This includes any action that could harm the goodwill associated with Noodles & Company's trademarks or the Noodles & Company system. The restriction extends not only to diverting customers but also to any action that could be prejudicial to the brand's reputation.
Additionally, during this two-year period, franchisees are also restricted from owning, maintaining, advising, being employed by, consulting for, making loans to, operating, engaging in, or having an ownership interest in any competitive business. This restriction applies if the competitive business is located within the franchisee's protected area, within a 15-mile radius of the former Noodles & Company restaurant, within a 15-mile radius of any Noodles & Company restaurant, or in any Designated Market Area where a Noodles & Company restaurant is located. However, these obligations do not apply after the second anniversary of when the franchisee ceases to have an ownership interest or stops providing services to the franchisee.
This type of non-compete clause is common in franchising to protect the brand and prevent unfair competition from former franchisees. Prospective Noodles & Company franchisees should carefully consider the implications of this restriction, especially if they plan to remain in the restaurant industry after their franchise agreement ends. They should also be aware that the obligations under the breached covenant will continue in effect for a period of time ending two years after the date such person starts compliance with the order enforcing the covenant.