Under what circumstances can Noodles & Company terminate the agreement with notice?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
15.01 General. Noodles & Company shall have the right to terminate this Agreement for "cause." "Cause" is hereby defined as a material breach or material default of this Agreement. Noodles & Company has the right to terminate this Agreement upon the following circumstances and in the following manners, each of which is deemed a material breach or default:
Defaults for which notice under this Section 15.04 shall be given include:
- (a) Performance Requirements.
If Area Operator fails to maintain or observe any of the standards, policies or procedures we prescribe (i) in this Agreement or any other agreement with Noodles & Company or its Affiliate related to this or any other franchise; (ii) in the Operations Manual; (iii) pursuant to our other policies, whether or not written, which describe Area Operator's duties, obligations, conditions, covenants, or performance requirements; or (iv) in other written documentation, including, without limitation, the requirements and specifications concerning the (a) quality, services, and cleanliness of the Restaurant; (b) the products and services sold or provided at the Restaurant, or the operation of the Restaurant; (c) any other operational and other performance requirements; and (d) the overall quality, service or cleanliness of the Restaurant is determined by us to be unsatisfactory or damaging to the brand or customer experience.
- (b) Failure to Adequately Maintain Bank Account.
If Area Operator fails to maintain adequate resources in the designated bank account (as described in Section 6.04) to fully and timely satisfy all Sweeps of the account Noodles & Company is permitted to make under this Agreement.
(m) fail to timely obtain and continue in force all licenses and permits, including liquor licenses necessary to open and construct the restaurant and not cure such failure as soon as possible and in any event within 20 days after receipt of notice unless no cure is possible, in which case there shall be no cure period;;
(n) shall default in three or more material obligations within the Term of the Agreement for which written notice has been provided, if required, or for which no notice was given if none was required, such repeated course of conduct, which need not be the same or identical breaches, shall itself be grounds for termination of this Agreement without further notice or an opportunity to cure; or
(o) fail to operate in accordance with the System and not cure such failure as soon as possible, and in any event within 20 days after receipt of notice, unless no cure is possible
If any such default is not cured within that time period, or such longer time period as applicable law may require or as we may specify in the notice of default, this Agreement and all rights granted by it shall thereupon automatically terminate without further notice or opportunity to cure.
Noodles & Company shall not, however, be precluded from contesting the validity, enforceability, or application of such laws or regulations in any action, arbitration, hearing or dispute relating to this Agreement or the termination thereof.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, Noodles & Company can terminate the franchise agreement for cause, which is defined as a material breach or default of the agreement. Several specific circumstances can lead to termination with notice. These include failing to maintain the standards, policies, and procedures prescribed by Noodles & Company in the franchise agreement, operations manual, or other written documentation related to the restaurant's quality, services, cleanliness, products, operation, and overall customer experience.
Another cause for termination with notice is the failure to maintain adequate resources in the designated bank account to satisfy sweeps Noodles & Company is permitted to make. Additionally, a default in three or more material obligations within the term of the agreement, for which written notice has been provided (if required), can result in termination. Failing to operate in accordance with the Noodles & Company system and not curing this failure within 20 days after receiving notice, unless no cure is possible, is also grounds for termination.
Noodles & Company must provide the Area Operator with a notice of default, and the agreement will terminate automatically if the default is not cured within the specified time period, unless applicable law requires a longer notice period or Noodles & Company specifies a longer period in the notice. However, Noodles & Company retains the right to contest the validity or application of any laws or regulations related to the termination.
It is important for prospective Noodles & Company franchisees to understand these conditions, as failure to comply can lead to the termination of their franchise agreement. Franchisees should carefully review the franchise agreement and operations manual to ensure they understand their obligations and the standards they must maintain to avoid default and potential termination.