Noodles And Company
Noodles & Company offers franchises in casual dining restaurants focusing on noodle dishes, salads, soups, and desserts. Known for its diverse menu options, the franchise operates in the quick-service restaurant sector.
Noodles And Company franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation ranges from $669,000 to $1,412,000. This includes a franchise fee of $35,000 and development fees but excludes the cost of buying or renting the business location [p.1].
What is the initial franchise fee?
The initial franchise fee is $35,000 and is payable upon execution of the agreement or when construction is commenced for the premises, whichever first occurs. This fee is non-refundable [p.172].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is 5.0% of Net Royalty Sales, payable weekly [p.172]. Additionally, there is a Marketing Administration Fee (MAF) of 1.25% of Net Royalty Sales, also due weekly on the first business day following the Reporting Period [p.186].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement term length isn't specified in these excerpts. However, the franchisee has an option to renew their Franchise Agreement for a 10-year term upon expiration, subject to certain conditions [p.234].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, a sale or transfer of ownership of a franchise typically requires prior written consent from Noodles & Company [p.6]. However, there are exceptions for cases involving the death or legal incapacity of an Area Operator or its owner holding 50% or more equity or voting power, where heirs have up to six months to either enter into a new Franchise Agreement or sell the franchise to an approved entity [p.198].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so [p.6(c)]. This isn't specified in the excerpts for other specific grounds.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific details on net worth or liquid capital requirements for franchisees. However, it does mention that Noodles & Company may require financial statements and other information related to your financial qualifications as part of their decision process [p.118].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory under either the Franchise Agreement [p.49] or the Area Development Agreement [p.51]. You may face competition from other franchisees, company-owned outlets, and other channels of distribution or competitive brands that the franchisor controls. Additionally, while there is a protected area around your restaurant to prevent direct competition, Non-Traditional Venues are excluded from this protection [p.161], allowing the franchisor to develop such locations even within your protected area.
What training and ongoing support does the franchisor provide?
The franchisor provides IT training and support services as required under the IT Support Services Agreement [p.191]. Additionally, new Operating Partners and general managers must complete designated certified training programs before assuming their positions [p.232]. The franchisor may also require periodic or additional training for existing personnel based on re-training needs, new product roll-outs, or equipment usage [p.232]. This includes covering all compensation and expenses related to such training [p.232].
How many franchised outlets are there, and how many have closed or been terminated?
As of December 31, 2024, there were 92 franchised restaurants in operation. Seven franchise restaurants closed in 2024, three closed in 2023, and one closed in 2022 [p.259].
Does the franchisor share any financial performance or earnings information?
The franchisor does not make any financial performance representations other than providing actual records of an existing outlet if purchased. However, it may provide such records upon request for a specific location or circumstances [p.89]. The franchisor's annual revenue and certain service fees are disclosed but do not reflect costs that must be deducted [p.32, p.85]. This isn't specified in the excerpts regarding general financial performance or earnings projections.
What am I restricted to selling, and where must I buy supplies?
You are required to sell all menu items designated by Noodles & Company as part of its standard menu and provide all standard services it has designated. You may have to buy or lease certain items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than other options [p.4]. Additionally, you must use and offer for sale only food products, beverages, ingredients, uniforms, packaging materials, menus, forms, labels, and other supplies that conform to Noodles & Company's specifications and quality standards or are purchased from suppliers approved by them [p.30].