Is the seller responsible for all tax liabilities related to Noodles & Company, or are there exceptions?
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.
You will promptly pay all federal, state and local taxes arising out of the operation of your business. We will not be liable for these or any other taxes and you herby do and will indemnify us for any such taxes that may be assessed or levied against us which arise or result from your business. You shall reimburse us for any sales tax, gross receipts tax, use tax or other tax or assessment imposed by any taxing authority in the state where the Restaurant is located on any fees or other amounts payable to us under this Agreement. Such taxes are distinguishable from income taxes imposed on us by the jurisdiction in which the Restaurant is located. Such income taxes are our responsibility.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, franchisees are responsible for most tax liabilities related to their Noodles & Company restaurant. Noodles & Company will not be liable for any sales, use, service, occupation, exercise, gross receipts, income, property, or other taxes connected to the franchisee's sales or business operations. The only exception is for taxes that Noodles & Company is legally obligated to collect from the franchisee.
This means that as a Noodles & Company franchisee, you will need to budget for and manage all tax obligations arising from your restaurant's operation. This includes sales taxes, property taxes, income taxes, and any other applicable taxes. It is important to maintain accurate records and comply with all tax laws to avoid penalties or legal issues.
The FDD also states that the franchisee must indemnify Noodles & Company for any taxes assessed against them that result from the franchisee's business. Furthermore, franchisees must reimburse Noodles & Company for any sales tax, gross receipts tax, use tax, or other tax imposed on fees or other amounts payable to Noodles & Company under the Franchise Agreement, with the exception of income taxes imposed on Noodles & Company by the jurisdiction in which the Restaurant is located, which are Noodles & Company's responsibility.