When transferring a Noodles & Company franchise, must the proposed transferee be an entity?

According to Noodles & Company's 2025 Franchise Disclosure Document, the proposed transferee must be an entity when transferring a franchise. Specifically, the document states that the proposed transferee must be a corporation, partnership, limited liability company, or other legal entity. Additionally, the transferee and its owners must provide Noodles & Company with all requested information on a timely basis. The owners must be individuals acting in their individual capacities, be of good character and reputation, and possess sufficient business experience, aptitude, and financial resources to develop Noodles & Company restaurants. They must also meet Noodles & Company's then-current standards for approval.

This requirement ensures that the transferee has a formal business structure, which can provide stability and accountability in operating the franchise. By requiring the owners to be individuals of good character with sufficient business acumen, Noodles & Company aims to maintain the quality and reputation of its brand. This also allows Noodles & Company to gather necessary information about the transferee's owners to assess their suitability as franchisees.

However, the proposed transferee cannot be, or become, an entity, or be, or become, affiliated with an entity, that is a Publicly Held Entity. This restriction likely aims to prevent the franchise from being subject to the reporting and information requirements associated with publicly traded companies, which could add complexity and potentially dilute the franchisor's control over the franchise operations. Prospective franchisees should carefully review these conditions and ensure they meet all requirements before proceeding with a transfer.