Considering the litigation involving Noodles & Company mentioned in Item 3, does this impact the franchisee's obligations as outlined in Item 9?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
9. Except as expressly modified by this Addendum, the Area Development
Agreement remains unmodified and in full force and effect.
ADDENDUM TO THE NOODLES & COMPANY FRANCHISE AGREEMENT REQUIRED FOR NORTH DAKOTA FRANCHISEES
This Addendum to the Noodles & Company Franchise Agreement dated between Noodles & Company and ("Area Operator") is entered into simultaneously with the execution of the Franchise Agreement.
- 1. The provisions of this Addendum form an integral part of, and are incorporated into, the Franchise Agreement. This Addendum is being executed because: (A) the offer or sale of the franchise to Area Operator was made in the State of North Dakota; (B) Area Operator is a resident of the State of North Dakota; and/or (C) your Noodles & Company Restaurant will be located or operated in the State of North Dakota.
- 2. ACKNOWLEDGMENTS. The acknowledgments in Sections 1.02 (c), (d) and (e) of the Franchise Agreement are hereby deleted.
- 3. The following sentence is added to the end of Sections 7 and 16.05:
Covenants not to compete are generally considered unenforceable in the State of North Dakota.
4. The following sentences are added to the end of Section 19.01:
Pursuant to the North Dakota Franchise Investment Law, any provision requiring franchisees to consent to the jurisdiction of courts outside North Dakota or to consent to the application of laws of a state other than North Dakota is void. Further, any provision requiring franchisees to agree to the arbitration or mediation of disputes at a location that is remote from the franchisee's business has been deemed unfair, unjust, or inequitable by the North Dakota Securities Commissioner. Accordingly, the site of arbitration or mediation must be agreeable to all parties.
5. The following sentence is added to the end of Section 19.04:
Pursuant to the North Dakota Franchise Investment Law, any provision requiring franchisees to consent to the jurisdiction of courts outside North Dakota or to consent to the application of laws of a state other than North Dakota is void.
What This Means (2025 FDD)
Based on the 2025 Noodles & Company Franchise Disclosure Document, Item 3, which discusses litigation, does not directly address or modify the franchisee's obligations as outlined in Item 9. However, Item 22 includes addenda to the franchise agreement that address specific state laws, which may indirectly affect a franchisee's obligations.
For example, the addendum for North Dakota franchisees modifies sections of the franchise agreement related to non-compete clauses and jurisdiction, stating that covenants not to compete are generally considered unenforceable in North Dakota and that provisions requiring franchisees to consent to jurisdiction outside of North Dakota are void. Similarly, the addendum for Maryland franchisees defers the payment of the franchise fee until Noodles & Company has fulfilled its initial obligations and the restaurant has commenced operating.
These addenda indicate that while Item 3 itself may not alter Item 9 obligations, state-specific laws and regulations can lead to modifications in the franchise agreement, potentially impacting a franchisee's obligations. Therefore, prospective franchisees should carefully review any state-specific addenda to understand how their obligations may be affected by local laws and the outcome of any litigation disclosed in Item 3.