Can Noodles & Company provide cost of goods rebates to franchisees?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
As discussed in Section 9.11 of this Agreement, at our election, supplier rebates or allowances attributable to Marketing may be paid into the BDF and used by us, in our sole discretion, for any purpose permitted by the BDF.
The BDF will be accounted for separately from our other funds. All disbursements from the BDF shall be made first from income and then from contributions. While our intent is to balance the BDF on an annual basis, from time to time the BDF may run at either a surplus or deficit. We may spend in any fiscal year an amount greater or less than the aggregate contributions of all Noodles & Company owned and franchised Restaurants to the BDF in that year, and the BDF may borrow from us or other lenders to cover deficits in the BDF and we may cause the BDF to invest any surplus for future use by the BDF and roll over unspent monies to the following year. We will prepare annually an unaudited statement of monies collected and costs incurred by the BDF and furnish a copy to you upon your written request. Except as otherwise expressly provided in this Section 10.01, we assume no direct or indirect liability or obligation with respect to the maintenance, direction or administration of the BDF. We do not act as trustee or in any other fiduciary capacity with respect to the BDF.
Although the BDF is intended to maximize general recognition and patronage of the brand and the Marks for the benefit of all Noodles & Company Restaurants, we cannot assure you that any particular Noodles & Company Restaurant will benefit directly or pro-rata from the placement of advertising. Additionally, we reserve the right to define, at any time, the measurement terms for any media coverage. The BDF may be used to pay for the cost of preparing and producing creative materials and programs we select, including video, audio, electronic and printed advertising materials, media planning and buying services, and for the cost of employing advertising agencies and supporting market research activities. We may furnish you with marketing, advertising and promotional materials at cost, plus any related administrative, shipping, handling and storage charges.
We may, as we deem appropriate, seek the advice of owners of Noodles & Company Restaurants by formal or informal means with respect to the creative concepts and media used for programs financed by the BDF.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Noodles & Company may receive supplier rebates or allowances, but these are specifically designated for marketing purposes. According to Item 23, these rebates, if attributable to marketing, may be paid into the Brand Development Fund (BDF).
The BDF is managed at Noodles & Company's discretion and used for purposes permitted by the BDF. The funds are accounted for separately from Noodles & Company's other funds, and disbursements are made first from income and then from contributions. While the intent is to balance the BDF annually, it may run a surplus or deficit. Noodles & Company can spend more or less than the aggregate contributions from all restaurants (both company-owned and franchised) in any given year. They may also borrow funds or invest surpluses for future use.
Noodles & Company prepares an annual unaudited statement of monies collected and costs incurred by the BDF, which is available to franchisees upon written request. However, Noodles & Company does not guarantee that any particular restaurant will directly or pro-rata benefit from advertising funded by the BDF. The BDF can be used for various marketing-related costs, including creative materials, media planning, advertising agencies, and market research. Noodles & Company may also furnish marketing materials to franchisees at cost, plus related charges. Therefore, franchisees should not expect direct cost of goods rebates, but rather potential benefits from marketing efforts funded through the BDF.