What standards must the owners of the proposed transferee meet for Noodles & Company approval?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) the proposed transferee must be a corporation, partnership, limited liability company or other legal entity; transferee and its owners must provide us on a timely basis all information we request, and the owners must be individuals acting in their individual capacities who are of good character and reputation, who must have sufficient business experience, aptitude and financial resources to develop Noodles & Company restaurants pursuant to this Agreement, and who must otherwise meet our then current standards for approval;
(c) the proposed transferee may not be, or become, an entity, or be, or become, affiliated with an entity, that is a Publicly Held Entity;
(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;
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 wishes to transfer their rights, the proposed transferee and their owners must meet several standards for approval. The owners must be individuals acting in their individual capacities who are of good character and reputation. They also need to demonstrate sufficient business experience, aptitude, and financial resources to successfully operate the Noodles & Company restaurant.
Furthermore, the proposed transferee cannot be a Publicly Held Entity or affiliated with one, meaning they cannot be subject to the reporting and information requirements of the Securities Exchange Act of 1934. The transferee and its owners must also agree to be bound by all the provisions of the then-current Area Development Agreement for the remainder of its term.
In addition to these conditions, the transferee must obtain an acceptable assignment of Lease(s) from each landlord for each Noodles & Company restaurant contemplated by the agreement. After the transfer is complete, the transferee must own the minimum number of Noodles & Company restaurants that Noodles & Company requires of other Area Operators. These requirements ensure that any new owner is well-qualified and committed to upholding the standards of the Noodles & Company franchise system.