For how long does the non-competition covenant last after transferring a Noodles & Company franchise?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- (k) you and your Owners must execute a non-competition covenant, in form and substance satisfactory to us, in favor of us and the transferee agreeing that, for a period of two years, starting on the effective date of the Transfer, you and your Owners will not directly or indirectly (such as through members of his/her or Immediate Families) own any legal or beneficial interest in, or render services or give advice to: (1) any Competitive Business; or (2) any entity which grants franchises, licenses or other interests to others to operate any Competitive Business in any Designated Market Area (as defined by Nielsen Media Research) where a Noodles & Company Restaurant is located, whether Company-owned or franchised, or within any area that is or was within an Area Development Area or a Protected Area, as those terms are defined in the Area Development Agreement and this Agreement;
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, if you transfer your franchise, you and your owners must agree to a non-competition covenant. This covenant lasts for two years, starting on the effective date of the transfer.
During this two-year period, you and your owners are restricted from owning, operating, or being involved with any Competitive Business. This includes owning any legal or beneficial interest in, or rendering services or giving advice to a Competitive Business. The restriction also applies to any entity that grants franchises or licenses to operate a Competitive Business.
The non-compete area includes any Designated Market Area where a Noodles & Company Restaurant is located, whether it's company-owned or franchised. It also covers any area that is or was within an Area Development Area or a Protected Area, as defined in the Area Development Agreement and Franchise Agreement. This ensures that the transferee can operate the Noodles & Company restaurant without direct competition from the previous owner and their affiliates within a defined geographic area.