What rights must the transferee acquire in a concurrent transaction when transferring a Noodles & Company Area Development Agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(d) the transferee and its owners must agree to be bound by all of the provisions of our then current Area Development Agreement for the remainder of the Term;
(e) the transferee must acquire, in a concurrent transaction, all of your rights and the rights of your Owners and Affiliates under all agreements between you or your Affiliates and us or our Affiliate, regarding all restaurants contemplated by this agreement not yet developed and/or operating;
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, a transferee in an Area Development Agreement transfer must acquire all rights of the transferor. Specifically, the transferee must acquire all rights of the transferring Area Developer, its owners, and affiliates under all agreements between them and Noodles & Company or its affiliates. This acquisition must occur in a concurrent transaction. These agreements pertain to all Noodles & Company restaurants contemplated by the Area Development Agreement that are not yet developed or operating.
This condition ensures that the transferee takes on the full responsibility and potential of the existing development agreement. By acquiring all rights, the transferee steps into the shoes of the original developer, assuming both the benefits and obligations associated with developing the remaining Noodles & Company restaurants in the designated area. This requirement aims to maintain continuity and commitment to the development plan initially agreed upon.
For a prospective Noodles & Company franchisee, this means that if they are considering purchasing an existing Area Development Agreement, they must be prepared to take on the full scope of the original agreement. This includes understanding the development schedule, financial obligations, and any other commitments made by the original developer. It is crucial to conduct thorough due diligence to assess the remaining development potential and associated costs before proceeding with the transfer. This also ensures that the new area developer is committed to the brand and has the resources to continue developing new restaurants.