Under what conditions can Noodles & Company transfer or assign the Area Operator Agreement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
7. AREA OPERATOR'S RIGHT TO TRANSFER.
- 7.01 Franchisor's Approval. Your rights and duties under this Agreement are personal to you and your Principal Owners. Accordingly, neither you nor any of your Owners may Transfer the Development Rights or any direct or indirect interest therein without our prior written consent, which may be withheld in our sole discretion. If we are required by applicable law to permit a transfer, the criteria in Section 7.02 must be met and you must obtain our approval. Any such transfer without such approval or compliance constitutes a breach of this Agreement and is void and of no force or effect. You may not, under any circumstances, directly or indirectly, subfranchise or sublicense any of your rights hereunder. If applicable law does not require us to permit a transfer, no transfer shall be permitted and Section 7.02 will not apply.
- 7.02 Conditions for Approval. If we have not exercised our right of first refusal under Section 7.06, and we are required by law to permit a transfer of this Agreement, we will not unreasonably withhold our approval of a Transfer of the Development Rights that meets all of the restrictions, requirements and conditions we impose on the transfer, the transferor(s) and the transferee(s), including without limitation the following:
- (a) you and your Owners and Affiliates must be in compliance with the provisions of this Agreement, all Franchise Agreements executed pursuant hereto and all other agreements with us or our Affiliate, if applicable;
- (b) the proposed transferee must be a corporation, partnership, limited liability company or other legal entity; transferee and its owners must provide us on a timely basis all information we request, and the owners must be individuals acting in their individual capacities who are of good character and reputation, who must have sufficient business experience, aptitude and financial resources to develop Noodles & Company restaurants pursuant to this Agreement, and w
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, a franchisee's rights and duties under the Area Operator Agreement are personal to them and their Principal Owners. Therefore, neither the franchisee nor their owners can transfer the Development Rights or any direct or indirect interest without Noodles & Company's prior written consent, which can be withheld at their sole discretion. Any transfer without approval constitutes a breach of the agreement and is considered void. Subfranchising or sublicensing any rights is not permitted under any circumstances.
If applicable law requires Noodles & Company to permit a transfer, the franchisee must meet specific criteria and obtain approval. Noodles & Company will not unreasonably withhold approval if they haven't exercised their right of first refusal and the transfer meets all restrictions, requirements, and conditions imposed on the transfer, transferor(s), and transferee(s). These conditions include compliance with the Area Operator Agreement, all Franchise Agreements, and other agreements with Noodles & Company or its affiliates.
The proposed transferee must be a corporation, partnership, limited liability company, or other legal entity. The transferee and its owners must provide all requested information on a timely basis. The owners must be individuals of good character and reputation with sufficient business experience, aptitude, and financial resources to develop Noodles & Company restaurants. These stipulations ensure that any potential transferee meets Noodles & Company's standards and can successfully operate the franchise.