Under what circumstances is a Noodles & Company franchisee exempt from paying the transfer fee?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
iable for claims arising out of your franchise operations. | | Transfer of Franchise | $3,500 per restaurant transferred or the amount stated in our then current Franchise Agreement. This is in addition to any other transfer fees required under any other agreements with us or our affiliate and payment of all of our costs associated with the transfer. | Upon sale or transfer of a franchised restaurant | Except in the case of a transfer to a corporation formed solely for the convenience of ownership or under circumstances regarding death or disability, you must pay us a transfer fee. Transfers are not allowed without our consent unless the law requires us to permit the transfer. | |-----------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------| | Transfer of Development Agreement | $7,500, or the amount stated in our then current ADA, for each Noodles & Company restaurant contemplated to be, but not yet, developed under the ADA. This is in addition to any other transfer fees required under other agreements with us or our affiliates and payment of all of our costs associated with the transfer. | Upon transferring the ADA | Except in the case of a transfer to a corporation formed solely for the convenience of ownership or under circumstances regarding death or disability, you must pay us a transfer fee. Transfers are not allowed without our consent unless the law requires us to permit the transfer. |
NOTES
Source: Item 6 — OTHER FEES (FDD pages 19–22)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, a franchisee is exempt from paying the transfer fee under specific circumstances. Generally, a transfer fee of $3,500 per restaurant is required upon the sale or transfer of a franchised restaurant. This fee can also be the amount stated in the then-current Franchise Agreement, in addition to any other transfer fees required under any other agreements with Noodles & Company or its affiliate, plus payment of all of Noodles & Company's costs associated with the transfer. A similar transfer fee structure applies to the transfer of a Development Agreement, set at $7,500, or the amount stated in the then-current ADA, for each Noodles & Company restaurant contemplated to be, but not yet, developed under the ADA.
However, the FDD specifies exceptions to this general rule. A Noodles & Company franchisee is exempt from paying the transfer fee in two primary scenarios: (1) in the case of a transfer to a corporation formed solely for the convenience of ownership, or (2) under circumstances regarding death or disability. These exemptions provide some flexibility for franchisees facing specific life events or structuring their business for administrative ease.
It's important to note that transfers are generally not allowed without Noodles & Company's consent, unless the law requires Noodles & Company to permit the transfer. This underscores the franchisor's control over who becomes a franchisee and ensures that any new franchisee meets their standards. Prospective franchisees should carefully consider these transfer conditions and understand the implications for the future sale or transfer of their Noodles & Company franchise.