Under what circumstances must a Noodles & Company franchisee reimburse Noodles & Company through indemnification?

Question

Accepted Answer

| Interest on late payments                                | 1.5% per month or the maximum rate allowed by law, whichever is less                                                                                                                                | Immediately                 | The interest rate applies to any money you owe us or any of our affiliates after the due date; payment made by electronic withdrawal.                                                                                                                    |
|-------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Fees to evaluate and approve alternative suppliers | Our reasonable costs and expenses, which currently are expected to range between \$0 and \$2,000 per sku, although costs could greatly exceed those amounts depending on the product | Upon receipt of our bill | We may impose reasonable inspections and supervision fees to cover our costs in evaluating and maintaining alternative brands or suppliers you propose in accordance with the Franchise Agreement; payment made by electronic withdrawal. |
| Audit | Cost of audit, which is expected to range between \$3,000 and \$4,000, if a discrepancy is found in accordance with the Franchise Agreement | Completion of audit | Payable only if you fail to furnish required information or if we find an understatement of Net Royalty Sales greater than 1.0%; payment made by electronic withdrawal. |
| Insurance | Will vary if incurred | Will vary as incurred | If you fail to obtain the required insurance coverage for the Noodles & Company restaurant, we may obtain coverage at your expense. You must list Noodles & Company as an additional insured on all policies. |
| Maintenance costs | Will vary if incurred | As incurred | If you fail or refuse to maintain the Noodles & Company restaurant as required, we have the right to do so on your behalf and at your expense and you must cover our expenses in doing so. |
| IT Services | Varies | As incurred | Amounts described in Item 11. |
| Restaurant Technology Support | \$1,000 per month, per restaurant | Monthly | Payment is made by automatic electronic withdrawal. |
| Attorneys' fees | Will vary if incurred | As incurred | Payable if we prevail in any |
| and other costs |  |  | legal dispute with you. |
| Indemnification | Will vary if incurred | As incurred | You must reimburse us if we are held liable for claims arising out of your franchise operations. |

Source: Item 6 — OTHER FEES (FDD pages 19–22)

Under what circumstances must a Noodles & Company franchisee reimburse Noodles & Company through indemnification?

Answer from 2025 FDD Document

What This Means (2025 FDD)

Interest on late payments	1.5% per month or the maximum rate allowed by law, whichever is less	Immediately	The interest rate applies to any money you owe us or any of our affiliates after the due date; payment made by electronic withdrawal.
Fees to evaluate and approve alternative suppliers	Our reasonable costs and expenses, which currently are expected to range between $0 and $2,000 per sku, although costs could greatly exceed those amounts depending on the product	Upon receipt of our bill	We may impose reasonable inspections and supervision fees to cover our costs in evaluating and maintaining alternative brands or suppliers you propose in accordance with the Franchise Agreement; payment made by electronic withdrawal.
Audit	Cost of audit, which is expected to range between $3,000 and $4,000, if a discrepancy is found in accordance with the Franchise Agreement	Completion of audit	Payable only if you fail to furnish required information or if we find an understatement of Net Royalty Sales greater than 1.0%; payment made by electronic withdrawal.
Insurance	Will vary if incurred	Will vary as incurred	If you fail to obtain the required insurance coverage for the Noodles & Company restaurant, we may obtain coverage at your expense. You must list Noodles & Company as an additional insured on all policies.
Maintenance costs	Will vary if incurred	As incurred	If you fail or refuse to maintain the Noodles & Company restaurant as required, we have the right to do so on your behalf and at your expense and you must cover our expenses in doing so.
IT Services	Varies	As incurred	Amounts described in Item 11.
Restaurant Technology Support	$1,000 per month, per restaurant	Monthly	Payment is made by automatic electronic withdrawal.
Attorneys' fees	Will vary if incurred	As incurred	Payable if we prevail in any
and other costs			legal dispute with you.
Indemnification	Will vary if incurred	As incurred	You must reimburse us if we are held liable for claims arising out of your franchise operations.