Does Noodles & Company prohibit franchisees from having an undisclosed interest in a Competitive Business?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
During the term of the Franchise Agreement, you and your Owners shall not, without Noodles & Company's prior written consent, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person, persons, partnership, limited liability company, or corporation:
(c) Own, maintain, advise, be employed by, consult for, make loans to, operate, engage in or have an ownership interest (including any right to share in revenues or profits) in any Competitive Business which is, or is intended to be located within:
(1) the Protected Area;
(2) a radius of 15 miles from your Noodles & Company Restaurant;
(3) a radius of 15 miles of any Noodles & Company Restaurant; or
(4) the United States.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, franchisees and their owners are restricted from having an ownership interest in a Competitive Business without prior written consent from Noodles & Company. This restriction applies both during the term of the Franchise Agreement and for a period after the agreement expires or terminates.
The definition of a Competitive Business includes any restaurant that has more than 10% of its operating revenues from the sale of specified dishes (noodle, pasta, Asian, Italian, or Mediterranean), operates in a fast casual or quick casual format, or is substantially similar to the Noodles & Company concept.
The restrictions apply to businesses located within the franchisee's Protected Area, within a 15-mile radius of any Noodles & Company Restaurant, or even across the United States. After the termination or expiration of the Development Agreement or Franchise Agreement, these restrictions continue for two years. However, these restrictions do not apply after the second anniversary of when the franchisee no longer has an ownership interest or provides services to the franchise.