Does the obligation to pay the Franchise Fee for Noodles & Company restaurants survive the termination of the agreement?

According to the 2025 Noodles & Company Franchise Disclosure Document, the obligation to pay the Franchise Fee for restaurants that were required to be open prior to the termination of the agreement survives the termination. This means that if a Noodles & Company franchisee was obligated to have a restaurant open and operating before the termination date, the franchisee remains responsible for paying the franchise fee associated with that location, even after the franchise agreement has ended.

This condition is significant for prospective Noodles & Company franchisees because it clarifies the financial responsibilities that extend beyond the active term of the franchise agreement. If a franchisee is in the process of developing a location but the agreement is terminated before the restaurant opens, the franchisee could still be liable for the franchise fee if the required opening date preceded the termination. This could create a financial burden even if the restaurant never becomes operational.

Franchise agreements often include clauses that address financial obligations upon termination, but the specifics can vary widely. It is important for prospective franchisees to carefully review these clauses and understand the conditions under which they might be required to pay fees even after the agreement is no longer in effect. This particular clause in the Noodles & Company FDD highlights the importance of meeting development timelines to avoid potential financial liabilities.