What requirement does Noodles & Company have for leases where the franchisee or an affiliate owns the Premises?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
We also require that any lease in which you enter into for the Premises that you or an Affiliate owns, contain terms and conditions and payments that are commercially reasonable in our opinion.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, if a franchisee or an affiliate owns the premises for their Noodles & Company restaurant, any lease entered into must contain terms, conditions, and payments that Noodles & Company deems commercially reasonable. This requirement ensures that even when the franchisee has ownership ties to the property, the lease agreement reflects fair market practices.
This stipulation is important for prospective franchisees who may already own property they intend to use for their Noodles & Company restaurant. It means that the terms of the lease, including rental rates and other conditions, will be subject to Noodles & Company's approval to ensure they align with standard commercial real estate practices. This protects both the franchisee and Noodles & Company by preventing leases with unfavorable or unrealistic terms.
Noodles & Company's right to review and approve these leases is in line with standard franchising practices, where the franchisor maintains control over site selection and lease terms to protect brand standards and franchisee profitability. Franchisees should be prepared to provide detailed lease information to Noodles & Company and be open to negotiations to meet the franchisor's requirements for commercial reasonableness.