Under what conditions might a Noodles & Company franchisee need to begin lease payments before opening?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
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- In general, Noodles & Company negotiates the payment of its leases to coincide with the start of operations. However, in some cases it may be necessary to begin lease payments before opening in order to secure a particular location, or to accommodate the optimal timing of a new restaurant opening.
Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, it is typical for the company to negotiate lease payments to begin when the restaurant starts operating. However, there are circumstances where a franchisee may need to start making lease payments before the restaurant is open. This could occur to secure a specific location that is highly desirable. It could also happen to align with the optimal timing for opening a new Noodles & Company restaurant.
Starting lease payments early can impact a franchisee's initial investment and cash flow. The FDD includes a line item for "Pre-Opening Cash Occupancy Costs" which ranges from $0 to $8,000. This suggests that some franchisees may incur these costs, while others may not, depending on their lease agreement. These costs are paid to landlords and approved suppliers and are due as incurred, subject to negotiated terms.
Prospective Noodles & Company franchisees should carefully consider the potential for pre-opening lease payments when evaluating potential locations. They should discuss lease terms with the landlord and negotiate favorable conditions, if possible. Understanding these potential costs is crucial for accurate financial planning and ensuring sufficient capital to cover expenses before the restaurant generates revenue.