Under what conditions can Noodles & Company terminate the Area Development Agreement for cause?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section In Area Development Agreement | Summary |
|---|---|---|
| a. Length of Area Development Agreement term | Section 2.01 and Exhibit A | The terms begins on the date of the Area Development Agreement and expires on the earlier of the date set forth in Exhibit A to the Area Development Agreement or the date on which you have opened the cumulative number of Noodles & Company restaurants set forth in the Development Schedule. |
| b. Renewal or extension | Not applicable | |
| c. Requirements for you to | Not applicable | |
| renew or extend | ||
| d. Termination by you | Not applicable | |
| e. Termination by us without | Not applicable | |
| cause | ||
| f. Termination by us with cause | Section 8 | We can terminate for specified causes. 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. |
| g. "Cause" defined – curable defaults | Section 8.02 | You have 20 days to cure the following defaults: fail to meet any deadline in your Development Schedule; fail to construct any restaurant in the manner and using the materials we require; fail to obtain and maintain all licenses and permits necessary to construct and open; fail to operate in accordance with the System; and default on any obligation under any lease, any other agreement with us, or any obligation to any Designated or Approved Supplier or vendor. You have 30 days to cure any other defaults, except those discussed in h. below. 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. |
| ------------------------------------------ | -------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| ------------------------------------------ | -------------- | ------------------------------------------------------------------------------------------------------------ |
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 can terminate the Area Development Agreement for specific causes, as outlined in Section 8 of the agreement. These causes include any material default not timely cured under the Franchise Agreement or any other agreement between the franchisee and Noodles & Company. This also extends to defaults under agreements with vendors or suppliers of Noodles & Company's products, leases for the premises, and agreements with construction suppliers, product suppliers, or service providers. Additionally, any termination for any cause of the Franchise Agreement or any other agreement between the franchisee and Noodles & Company can lead to the termination of the Area Development Agreement.
There are specific curable defaults that, if not addressed within a certain timeframe, can lead to termination. Franchisees have 20 days to cure defaults such as failing to meet deadlines in the Development Schedule, failing to construct restaurants according to Noodles & Company's requirements, failing to obtain necessary licenses and permits, failing to operate in accordance with the System, and defaulting on obligations under leases, agreements with Noodles & Company, or obligations to designated or approved suppliers or vendors. For other defaults, franchisees have 30 days to cure them, except for those defaults that are non-curable.
It is important to note that a default under or termination of any Area Development Agreement consisting solely of the failure to meet the development schedule does not impact any then-effective franchise agreements. This means that if a franchisee is struggling to open new locations according to the agreed-upon schedule, Noodles & Company can terminate the Area Development Agreement without necessarily affecting the operation of existing Noodles & Company restaurants. This provision offers some protection to franchisees who may face challenges in meeting their development obligations, while still allowing Noodles & Company to maintain control over its expansion plans.
Prospective franchisees should carefully review Section 8 of the Area Development Agreement to fully understand the specific causes for termination and the corresponding cure periods. Understanding these conditions is crucial for maintaining a successful and compliant franchise relationship with Noodles & Company.