Is there a geographic limit to the non-compete clause in the Noodles & Company agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
(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) any Designated Market Area (as defined by Nielsen Media Research) where a Noodles & Company Restaurant is located.
-
Notwithstanding the foregoing, you will have no obligation under Section 5 or Section 6 after the second anniversary of the later of (a) the date you cease to have an ownership interest in Franchisee or (b) the date you cease to render services to Franchisee.
You and each of your Owners expressly acknowledge the possession of skills and abilities of a general nature and the opportunity to exploit such skills in other ways, so that enforcement of the covenants contained in Sections 5 and 6 will not deprive any of you of your personal goodwill or ability to earn a living.
If any covenant herein, which
restricts competitive activity, is deemed unenforceable by virtue of its scope or in terms of geographical area, type of business activity prohibited, and/or length of time, but could be rendered enforceable by reducing any part or all of it, you and we agree that it will be enforced to the fullest extent permissible under applicable law and public policy. Noodles & Company may obtain in any court of competent jurisdiction any injunctive relief, including temporary restraining orders and preliminary injunctions, against conduct or threatened conduct for which no adequate remedy at law may be available or which may cause it irreparable harm. You, and each of your Owners, acknowledge that any violation of Sections 4, 5, or 6 hereof would result in irreparable injury for which no adequate remedy at law may be available. If Noodles & Company files a claim to enforce this Agreement and prevails in such proceeding, you agree to reimburse Noodles & Company for all its costs and expenses, including reasonable attorneys' fees.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the non-compete clause has geographic limitations. Specifically, during the term of the agreement, franchisees and their owners are restricted from engaging in any competitive business within (1) the Protected Area, (2) a 15-mile radius from the franchisee's Noodles & Company Restaurant, (3) a 15-mile radius of any Noodles & Company Restaurant, or (4) any Designated Market Area where a Noodles & Company Restaurant is located. These restrictions apply to owning, maintaining, advising, being employed by, consulting for, making loans to, operating, engaging in, or having an ownership interest in any competitive business.
This means that as a Noodles & Company franchisee, you and your owners are limited in your ability to participate in any similar restaurant business within these defined geographic areas. The non-compete aims to protect Noodles & Company's market share and brand recognition within specific territories. The Designated Market Area (DMA) provision is particularly important, as DMAs can cover large regions, potentially restricting competitive activities across a wide area, even beyond the immediate vicinity of a Noodles & Company restaurant.
However, these non-compete obligations cease two years after the franchisee no longer has an ownership interest or provides services to the franchise. This time limit provides a window for former franchisees to pursue other ventures without being indefinitely restricted. The FDD also states that if any part of the non-compete agreement is deemed unenforceable due to its scope, geographic area, type of business activity, or length of time, it will be enforced to the fullest extent permissible under applicable law and public policy. This clause suggests that Noodles & Company intends to enforce the non-compete as broadly as possible while remaining within legal boundaries.