What right does Noodles & Company have regarding the Purchase Price in relation to tax liabilities?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
18.03 Taxes. We will have no liability for any sales, use, service, occupation, exercise, gross receipts, income, property or other taxes, whether levied upon your Noodles & Company Restaurant, your property or upon us, in connection with sales made or business conducted by you (except any taxes we are required by law to collect from you). Payment of all such taxes shall be your responsibility. In the event of a bona fide dispute as to your liability for taxes, you may contest your liability in accordance with applicable law. In no event, however, will you permit a tax sale, seizure, or attachment to occur against your Noodles & Company Restaurant or any of its assets.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company has no liability for taxes related to the franchisee's restaurant. Specifically, Noodles & Company will not be liable for any sales, use, service, occupation, exercise, gross receipts, income, property, or other taxes levied on the franchisee's Noodles & Company Restaurant, their property, or upon Noodles & Company itself, in connection with sales made or business conducted by the franchisee.
This means that as a Noodles & Company franchisee, you are solely responsible for paying all taxes associated with your restaurant's operation. This includes, but is not limited to, sales tax on meals, income tax on profits, and property tax on the restaurant location. Noodles & Company explicitly states that payment of all such taxes is the franchisee's responsibility.
The FDD does allow a franchisee to contest tax liability if there is a legitimate dispute, provided it's done in accordance with applicable law. However, the franchisee cannot allow a tax sale, seizure, or attachment to occur against their Noodles & Company Restaurant or any of its assets under any circumstances. This underscores the importance of diligent tax management and compliance for any Noodles & Company franchisee to avoid potential business disruption or asset loss.