Can I subfranchise or sublicense any of my rights under the Noodles & Company Area Development Agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
. DEVELOPMENT RIGHTS.**
2.01 Term and Development Fee. Unless sooner terminated in accordance with Section 8, the term of this Agreement (the "Term") starts on the date hereof and expires on the earlier of the expiration date set forth in Exhibit A or the date upon which Area Operator opens for operation the cumulative number of Noodles & Company restaurants in the Development Area (as such term is defined in Section 2.02 hereof) set forth in Exhibit A. At the time you sign this Agreement, you must pay us the nonrefundable Development Fee ("Development Fee") set forth in Exhibit A.
2.02 Development Rights.
(a) Upon the terms and subject to the conditions of this Agreement, Company hereby grants to Area Operator, and Area Operator hereby accepts, the right and obligation, during the Term (defined below), to develop Noodles & Company Restaurants in the geographic area defined as the Development Area defined below (the "Development Rights"). You shall have no right to subfranchise, sublicense, or otherwise grant sub rights to anyone.
- (b) No right or license is granted to Area Operator hereunder to use any trademarks, trade names, service marks, logotypes, insignias, trade dress, or designs owned by Noodles & Company, such right and license being granted solely pursuant to Franchise Agreements. Without limiting the generality of the foregoing, nothing in this Agreement shall permit Area Operator to own or operate a Noodles & Company Restaurant, except pursuant to duly executed and substituting Franchise Agreement, and Area Operator shall not use such trademarks, trade names, service marks, logotypes, insignias, trade dress, or designs without the prior express written consent of Noodles & Company.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, if you enter into an Area Development Agreement with them, you are explicitly prohibited from subfranchising or sublicensing any of your rights. The FDD states that you, as the Area Operator, have "no right to subfranchise, sublicense, or otherwise grant sub rights to anyone." This restriction is further reinforced in Section 7.01, which states, "You may not, under any circumstances, directly or indirectly, subfranchise or sublicense any of your rights hereunder."
This means that you, as the Area Operator, must personally fulfill the development obligations outlined in the Area Development Agreement. You cannot delegate the responsibility of opening and operating Noodles & Company restaurants to another party through a subfranchise or sublicense arrangement. This is a fairly standard practice in franchising, as franchisors typically want to maintain direct control over their brand and ensure consistent quality and operational standards.
While you cannot subfranchise or sublicense, the FDD does outline conditions under which you may be able to transfer your Development Rights to another party, subject to Noodles & Company's approval. These conditions include ensuring that you and your owners are in compliance with all agreements, that the proposed transferee meets Noodles & Company's standards, and that the transferee agrees to be bound by the current Area Development Agreement. However, even with these transfer provisions, the core restriction on subfranchising and sublicensing remains in place.