Under what conditions does Noodles & Company have the right to terminate the franchise agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| h. "Cause" defined – non curable defaults (continued) | Sections 15.02, 15.03 and 15.07 | While a default under or termination of any Area Development Agreement consisting solely of your failure to meet the development schedule thereunder does not impact any then effective franchise agreements, any material default not timely cured under the Franchise Agreement or any other agreement between us; under any agreement with any vendor or supplier of our Products; under any Lease for the leased Premises; under any agreement with any construction suppliers, product supplier or service providers, or any termination, for any cause of the Franchise Agreement or any other agreement between you and us entitles us to terminate the Area Development Agreement. |
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Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 63–83)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, Noodles & Company has the right to terminate the Area Development Agreement if the franchisee materially defaults and fails to correct the issue promptly. This includes defaults under the Franchise Agreement, any other agreements with Noodles & Company, agreements with vendors or suppliers of Noodles & Company products, leases for the premises, or agreements with construction suppliers, product suppliers, or service providers. Additionally, the termination of the Franchise Agreement or any other agreement between the franchisee and Noodles & Company for any reason also entitles Noodles & Company to terminate the Area Development Agreement.
This means that a Noodles & Company franchisee must maintain compliance with all agreements and obligations to avoid potential termination. The franchisee's adherence to the development schedule outlined in the Area Development Agreement does not impact any existing franchise agreements if the franchisee fails to meet the schedule. However, any other material default that is not corrected can lead to the termination of the Area Development Agreement, which could have significant financial and operational consequences for the franchisee.
This termination clause is fairly standard in franchising, as franchisors need to protect their brand and ensure consistent operations across all locations. Prospective Noodles & Company franchisees should carefully review all agreements and ensure they have the resources and capabilities to meet all obligations. It is important to understand the specific conditions that could trigger a termination and to have a plan in place to address any potential defaults promptly.