What is the nature of the development fee that the buyer pays to the seller at closing for Noodles & Company?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- 1.b Franchise and Development Fees. The Purchase Price shall be exclusive of the initial franchise fee due under the Franchise Agreement for each Restaurant listed on Exhibit A to be entered into on or before Closing.
Any development fees provided for in the Development Agreement or franchise fees for New Restaurants (as defined below), shall be in addition to the Purchase Price and shall be paid by Buyer to Seller in accordance with the terms of the Development Agreement and the franchise agreements entered into with respect to such New Restaurants.
At Closing, Buyer shall pay to Seller a nonrefundable development fee in an amount equal to ________________________________ and 00/100 Dollars ($________________).
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the buyer pays a nonrefundable development fee to the seller at closing. The specific amount of this development fee is not specified in the agreement but will be outlined in the Development Agreement. This fee is in addition to the purchase price and any initial franchise fees due for each restaurant, as detailed in Exhibit A of the Franchise Agreement.
The Development Agreement mandates the development of new Noodles & Company restaurants in a designated market area, as described in an exhibit attached to the agreement. The development schedule, also attached as an exhibit, dictates the timeline for these new restaurant openings. The buyer's obligation to pay the development fee is tied to these terms, ensuring Noodles & Company receives compensation for granting the rights to develop restaurants within a specific territory.
Prospective Noodles & Company franchisees should carefully review the Development Agreement and its exhibits to understand the full scope of their financial obligations and development responsibilities. It is crucial to clarify the exact amount of the nonrefundable development fee, the specific market area assigned, and the required development timeline before entering into the agreement. Understanding these details is essential for assessing the financial feasibility and operational demands of the franchise venture.