Under what circumstances is the Noodles & Company franchise fee payable?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
pay for damages of any claim for which Area Operator would otherwise be entitled to indemnification arises only if and to the extent that Area Operator's insurance coverage does not or would not (absent any right to indemnification by Noodles & Company) provide coverage for such claims. In the event that Area Operator has failed to obtain and keep in force all policies that it is obligated to carry under the terms of its agreements with Noodles & Company and one or more of such policies would or could have provided coverage for the claim, then Noodles & Company is not obligated to indemnify, defend or pay damages, settlements, or have any liability for such claim.
6. FEES.
6.01 Franchise Fee. You agree to pay us a nonrefundable franchise fee of $35,000 ("Franchise Fee"). The Franchise Fee is payable upon execution of this Agreement or when Construction is Commenced for the Premises for such Noodles & Company Restaurant, whichever first occurs. The Franchise Fee is non-refundable, in whole or in part, under any circumstances. The Franchise Fee for the first Restaurant developed by you (and the first $10,000 of the Franchise Fee for each other Restaurant) is deemed paid so long as the Development Fee under the Development Agreement has been timely paid in full; accordingly, the balance of the $25,000 for each Restaurant after the first one shall be paid upon execution of the Franchise Agreement, when Construction is Commenced or the date the franchised restaurant is required to be open under The Area Development Agreement, whichever first occurs.
6.02 Royalty Fees. You agree to pay us a continuing royalty fee in the amount of 5.0% of Net Royalty Sales (the "Royalty Fee") for each Reporting Period. A Reporting Period shall be defined as each one week period commencing on Wednesday and ending on Tuesday, or such other period as we shall determine from time to time. A Sweep Period shall be the period of time for which a Sweep of Area Operator's account has been made by Noodles & Company to obtain the Royalty Fee for Net Royalty Sales that have occurred, but for which a prior Sweep was not made.
6.03 Continuing Royalty Upon Default.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the franchise fee is payable upon the execution of the Franchise Agreement or when construction commences for the premises of the Noodles & Company restaurant, whichever occurs first. The standard franchise fee is $35,000 and is non-refundable under any circumstances.
For the first restaurant developed by a franchisee under an Area Development Agreement, the franchise fee is considered paid if the Development Fee has been paid in full. For subsequent restaurants, the first $10,000 of the franchise fee is also considered paid when the Development Fee is fully paid. The remaining balance of $25,000 for each restaurant after the first must be paid upon execution of the Franchise Agreement, when construction commences, or by the date the franchised restaurant is required to open per the Area Development Agreement, whichever comes first.
Noodles & Company requires that the franchise fee for a restaurant being developed under an Area Development Agreement must be paid by the Required Opening Date, as outlined in Exhibit A, regardless of whether the Franchise Agreement has been signed or if the restaurant is open or under construction. The obligation to pay the franchise fee for restaurants required to be open before the termination of the Area Development Agreement survives the termination of the agreement. Franchisees must also execute the Franchise Agreement and pay the Franchise Fee within 30 days of signing the lease for the premises or when construction commences, whichever occurs first.