Under what circumstances is the Addendum described in this section of the Noodles & Company Franchise Agreement executed?

According to the 2025 Noodles & Company Franchise Disclosure Document, the addendum to the Noodles & Company Franchise Agreement is executed simultaneously with the Franchise Agreement under specific circumstances related to the franchisee's location or residency. The primary reason for the addendum is to address state-specific legal requirements and ensure compliance with franchise laws. This is a common practice in franchising, as state laws vary significantly and require franchisors to tailor their agreements accordingly.

Specifically, the addendum is executed if (A) the offer or sale of the franchise was made in a particular state (e.g. Maryland, North Dakota, Minnesota, Hawaii, or Rhode Island), (B) the franchisee is a resident of that state, or (C) the Noodles & Company restaurant will be located or operated in that state. The addendum modifies certain sections of the standard franchise agreement to align with the franchise laws of that specific state. These modifications can include changes to acknowledgments, non-compete clauses, jurisdiction and venue for disputes, and conditions for termination or non-renewal.

For example, the addendum for Maryland franchisees includes clauses that defer initial fees and payments until Noodles & Company completes its pre-opening obligations and the store opens. It also clarifies that any general release of claims does not waive rights under the Maryland Franchise Registration and Disclosure Law. Similarly, the North Dakota addendum notes that covenants not to compete are generally unenforceable in that state and that franchisees cannot be forced to consent to jurisdiction or laws outside of North Dakota. These state-specific addenda are crucial for ensuring that both Noodles & Company and its franchisees are operating in compliance with local regulations and that franchisees' rights are protected under state law.