Do the parties' rights and obligations under paragraph 1.c survive closing for Noodles & Company?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
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- 15.09 Termination by Area Operator. If Area Operator is in full compliance with this Agreement, and Franchisor materially breaches this Agreement, Area Operator may terminate this Agreement effective 90 days after the delivery of written notice of termination if Area Operator gives written notice of such breach to Franchisor and Franchisor does not:
- (a) correct such failure within 90 days after delivery of notice of such breach; or
- (b) if such breach cannot reasonably be cured within 90 days after delivery of notice of such breach, undertake within 90 days after delivery of such notice, reasonable efforts to cure such breach, and ultimately cure such breach.
16. RIGHTS AND OBLIGATIONS UPON TERMINATION.
16.01 Expiration or Termination of Area Operator's Rights. Upon the expiration or termination of Area Operator's rights granted under this Agreement:
- (a) Area Operator shall immediately cease to use all trade secrets, Confidential Information, the Marks, and any confusingly similar trademark, service mark, trade name, logotype, or other commercial symbol or insignia. Area Operator shall immediately return all property belonging to Franchisor, including but not limited to, the Operations Manual, menus, advertising materials, computer software programs and all materials incorporating trade secrets or Confidential Information. Area Operator shall, at its own cost, make cosmetic changes to the Premises so that it no longer contains or resembles Noodles & Company's proprietary designs, including removal of all Noodles & Company identifying materials and distinctive cosmetic features and finishes, soffits, interior wall coverings and colors, exterior finishes and colors and signage from the Premises as we may reasonably direct.
- (b) Noodles & Company may retain all fees paid pursuant to this Agreement, and Area Operator shall immediately pay any and all amounts owing to Noodles & Company and its Affiliates.
- (c) Any and all obligations of Noodles & Company to Area Operator under this Agreement shall immediately cease and terminate.
- (d) Any and all rights of Area Operator under this Agreement shall immediately cease and terminate.
- (e) Area Operator shall immediately cease to operate the franchised Noodles & Company Restaurant, and shall not thereafter, directly or indirectly, represent to the public or hold itself out as a present or former Area Operator of Noodles & Company.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
Based on the 2025 Noodles & Company Franchise Disclosure Document, Section 16.02 addresses the survival of obligations upon termination or expiration of the agreement. It states that termination or expiration does not prejudice Noodles & Company's rights or remedies, including the right to recover damages. The Area Operator's obligations to act or abstain from acting according to the agreement remain in effect, and provisions constituting post-termination covenants, including arbitration of disputes, survive termination or expiration. The Area Operator must provide written confirmation of compliance with Section 16 within 30 days of termination. However, this section does not specifically address paragraph 1.c.
Section 16.01 outlines the rights and obligations upon termination of the Area Operator's rights, including ceasing the use of trade secrets, confidential information, and the Marks, as well as returning all property belonging to Noodles & Company. Noodles & Company may retain all fees paid, and the Area Operator must pay all amounts owed. All obligations of Noodles & Company to the Area Operator and all rights of the Area Operator terminate immediately. Again, this section does not explicitly mention paragraph 1.c.
To determine whether the rights and obligations under paragraph 1.c survive closing, a prospective Noodles & Company franchisee should carefully review the entire franchise agreement and seek clarification from the franchisor regarding the specific provisions of paragraph 1.c and their survival after termination or expiration. It is crucial to understand which obligations continue and for how long, as this can significantly impact post-termination activities and potential liabilities.