Under the Noodles & Company Franchise Agreement, is a franchisee's unauthorized transfer of the franchise considered a curable or non-curable default?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
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| h. "Cause" defined – defaults which cannot be cured | Sections 8.01 and 8.02 | Non-Curable defaults are insolvency; filing of a petition for bankruptcy or reorganization by or against you that is not discharged within 30 days; filing of a suit against you to foreclose on any mortgage or lien that is not dismissed within 30 days; filing for dissolution that is not dismissed within 30 days; appointment of a receiver; general assignment made for the benefit of your creditors; entry of final judgment of $25,000 or more against you that remains unsatisfied for more than 30 days; attachment of your accounts, property or assets; levy of execution against you or your business; unauthorized transfer; misrepresentation; conviction of a felony or other criminal offense that may adversely affect the System or our goodwill; breach of the Franchise Agreement in a manner that permits us to terminate; breach of any other agreement between you or any of your Affiliates and us or our Affiliate, unauthorized use or disclosure of confidential informa
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 63–83)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, an unauthorized transfer by a franchisee is considered a non-curable default. This means that if a franchisee sells, assigns, or otherwise transfers the agreement, any rights under it, or any ownership interest in the Noodles & Company restaurant without authorization, Noodles & Company has grounds for immediate termination of the franchise agreement.
Non-curable defaults are serious breaches of the franchise agreement that give Noodles & Company the right to terminate the agreement without providing the franchisee an opportunity to correct the issue. Other examples of non-curable defaults include insolvency, bankruptcy, a significant unsatisfied judgment against the franchisee, or unauthorized use of confidential information.
This provision protects Noodles & Company by ensuring that franchisees meet their obligations and that the brand maintains control over who operates its restaurants. Prospective franchisees should understand that any transfer of ownership or control must be approved by Noodles & Company, and failure to obtain this approval can result in the loss of the franchise.