During the term, can I own a competitive business within the Protected Area of my Noodles & Company franchise?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- 6.02 In-Term Covenants. During the Term, you shall not, without Noodles & Company's prior written consent, either directly or indirectly, for yourself, or through, on behalf of, or in conjunction with any person, persons, partnership, limited liability company, or corporation:
- (a) Divert or attempt to divert any business or customer of any Noodles & Company Restaurant to any competitor, by direct or indirect inducement or otherwise, or do or perform, directly or indirectly, any other act injurious or prejudicial to the goodwill associated with Noodles & Company's Marks or the System.
- (b) [Intentionally omitted]
- (c) Own, maintain, advise, be employed by, consult for, make loans to, operate, engage in or have an ownership interest (including any right to share in revenues or profits) in any Competitive Business which is, or is intended to be located within:
- (1) the Protected Area;
- (2) a radius of 15 miles from your Noodles & Company Restaurant;
- (3) a radius of 15 miles of any Noodles & Company Restaurant; or
- (4) the United States.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, during the term of the franchise agreement, franchisees are restricted from engaging in any competitive business. Specifically, without prior written consent from Noodles & Company, a franchisee cannot directly or indirectly own, maintain, advise, be employed by, consult for, make loans to, operate, engage in, or have an ownership interest in any competitive business. This restriction applies if the competitive business is located within the franchisee's Protected Area, within a 15-mile radius of the franchisee's Noodles & Company Restaurant, within a 15-mile radius of any Noodles & Company Restaurant, or within any Designated Market Area where a Noodles & Company Restaurant is located.
This non-compete clause is in place to protect Noodles & Company's market share and brand integrity. It prevents franchisees from using the knowledge and resources gained from operating a Noodles & Company franchise to benefit a competing business. The restrictions extend not only to direct ownership but also to other forms of involvement, such as advising or consulting for a competitor.
These in-term covenants are designed to prevent franchisees from diverting business or acting in ways that could harm the goodwill associated with the Noodles & Company brand. Violation of these terms could lead to legal action, including injunctive relief, where Noodles & Company seeks a court order to stop the franchisee's competitive activities. Franchisees should be aware that Noodles & Company may seek reimbursement for all costs and expenses, including reasonable attorneys' fees, if they prevail in enforcing these covenants.
It is important for prospective franchisees to fully understand the scope and limitations of these non-compete clauses before entering into a franchise agreement with Noodles & Company. Seeking legal counsel to review the franchise agreement and clarify any questions regarding these restrictions is advisable.