How is the Royalty fee paid to Noodles & Company, and when is it due?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| Type of fee | Amount | Due Date | Remarks (1) |
|---|---|---|---|
| Royalty | 5% of Net Royalty Sales (2) (3) | Payable on 1st Monday immediately following each "Reporting Period" (2) | Payment is made by automatic electronic withdrawal. |
NOTES
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- The term "Net Royalty Sales" means the aggregate amount of all sales of food, beverages and other products and merchandise sold and services rendered at or from the restaurant location or otherwise rendered to or for your Noodles & Company restaurant or your use of the Marks, including sales at or away from your Noodles & Company restaurant, whether for cash or credit, and regardless of collection in the case of credit, but excluding: (1) all federal, state or municipal sales or service taxes collected from customers and paid to the appropriate taxing authority; and (2) all bona fide, documented: (a) customer promotional discounts approved by us; (b) refunds; (c) voids; and (d) employee meal discounts. A Reporting Period is defined as each one-week period commencing on Wednesday and ending on Tuesday, or other period as we may determine.
Source: Item 6 — OTHER FEES (FDD pages 19–22)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the royalty fee is 5% of Net Royalty Sales. This fee is payable on the 1st Monday immediately following each "Reporting Period." The Reporting Period is defined as each one-week period commencing on Wednesday and ending on Tuesday, or other period as Noodles & Company may determine. Payment is made by automatic electronic withdrawal.
Net Royalty Sales includes all sales of food, beverages, other products, merchandise, and services at or from the restaurant location, including sales at or away from the Noodles & Company restaurant, whether for cash or credit. Excluded from Net Royalty Sales are: (1) all federal, state or municipal sales or service taxes collected from customers and paid to the appropriate taxing authority; and (2) all bona fide, documented: (a) customer promotional discounts approved by Noodles & Company; (b) refunds; (c) voids; and (d) employee meal discounts.
It is important for prospective franchisees to understand how Net Royalty Sales are calculated, as this directly impacts the amount of the royalty fee owed. Franchisees should also be aware that Noodles & Company uses automatic electronic withdrawal for royalty payments, so sufficient funds must be available in the designated account to avoid late payment fees. The FDD also mentions a 1.5% per month interest rate on late payments, or the maximum rate allowed by law, whichever is less.