Can Noodles & Company operate restaurants within the Development Area?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(c) During the Term, and provided you and your Affiliates are in compliance with this Agreement and all other agreements with us or any of our Affiliates (including Franchise Agreements signed pursuant to this Agreement), we will: (i) grant to you, in accordance with Section 3, that cumulative number of franchises for Noodles & Company restaurants set forth in Exhibit A, all of which are to be located within the geographical area described in Exhibit A and within the specific trade areas as agreed to by us and you therein ("the Development Area"); and (ii) not operate (directly or through an Affiliate), nor grant the right to operate, any Noodles & Company restaurants located within the Development Area, except for: (1) franchises granted pursuant to this Agreement; (2) Noodles & Company restaurants open (or under lease, construction, or other commitment to open) as of the date hereof; and (3) as set forth below in Sections 2.02(d) and (e).
(d) You acknowledge, however, that certain locations within the Development Area are by their nature unique and separate in character from the sites to which we intend to grant you a franchise or area Development Rights pursuant to this Agreement; such sites are referred to as "Non-Traditional Venues." As a result, you agree that Non-Traditional Venues are excluded from the Development Area (and any Protected Area under any Franchise Agreement) and we shall have the right to develop (by direct ownership, franchising, licensing or other means) such locations, even if such sites are located within the Development Area (and any Protected Area under any Franchise Agreement) and regardless of the proximity of such sites to any Noodles & Company restaurant for which you have or might have in the foreseeable future a franchise.
Non-Traditional Venues include, for example: (i) transportation facilities, including airports, train stations, subways and rail, and bus stations; (ii) military bases and government offices; (iii) sports facilities, including stadiums and arenas; (iv) amusement parks, zoos, and convention centers; (v) car and truck rest stops, and travel centers and Limited Access Highway oasis and rest and service areas; (vi) casinos, (vii) food courts; (viii) Indian reservations; and (ix) museums.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, Noodles & Company generally will not operate or grant the right to operate Noodles & Company restaurants within the Development Area granted to a franchisee. However, there are exceptions to this exclusivity. Noodles & Company retains the right to operate or franchise restaurants in "Non-Traditional Venues" within the Development Area, regardless of their proximity to a franchisee's location. These Non-Traditional Venues are excluded from the Development Area agreement.
Non-Traditional Venues include locations such as transportation facilities (airports, train stations, bus stations), military bases, government offices, sports facilities, amusement parks, zoos, convention centers, car and truck rest stops, travel centers, casinos, food courts, Indian reservations and museums. This means that even if a franchisee has secured a territory, Noodles & Company could still establish a presence in these types of venues within that territory.
This clause is significant for prospective franchisees as it limits the scope of their exclusive territory. While a franchisee may have development rights for a specific area, Noodles & Company can still compete within that area in Non-Traditional Venues. Franchisees should carefully consider the potential impact of these exceptions on their business when evaluating a Noodles & Company franchise opportunity.