Is prior approval from Noodles & Company required for a private placement of a Noodles & Company franchisee's securities?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Any proposed private placement of your or of your Affiliate's securities must be approved by us and our legal counsel prior to the offering of securities. You shall pay the costs of such review and associated legal fees.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, any proposed private placement of a franchisee's or their affiliate's securities requires prior approval from Noodles & Company and its legal counsel. The franchisee is responsible for covering the costs associated with this review, including legal fees.
This stipulation means that if a Noodles & Company franchisee seeks to raise capital through a private placement of securities, they must first obtain permission from Noodles & Company. This requirement allows Noodles & Company to maintain control over who invests in its franchisees and to ensure that such investments align with the brand's interests and standards.
The franchisee should factor in the time and expense associated with this approval process when considering a private placement. The obligation to pay for Noodles & Company's legal counsel's review adds to the financial burden of the transaction. Failing to obtain this approval beforehand could lead to a breach of the franchise agreement, potentially resulting in termination.