Did Noodles & Company admit liability or wrongdoing as part of the settlement?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 3: LITIGATION]
ITEM 3 LITIGATION
The State of Delaware, William French v. Card Compliant, LLC, et. al., Case No. N13C-06-289 FSS (Del. Super. Ct., New Castle County)
Noodles & Company was named as one of the defendants in an action initially filed under seal on June 28, 2013 and unsealed on March 24, 2014. The complaint alleged that defendants knowingly violated the Delaware Abandoned Property Law by failing to report and deliver "unclaimed gift card funds" to the State of Delaware, and knowingly made, used or caused to be made or used, false statements and records to conceal, avoid or decrease an obligation to pay or transmit money to Delaware in violation of the Delaware False Claims and Reporting Act. The complaint sought an order that defendants cease and desist from violating the Delaware False Claims and Reporting Act, unspecified monetary damages (including treble damages under the False Claims and Reporting Act), penalties, and attorneys' fees and costs.
This litigation was settled in August 2018. In the settlement, Noodles & Company paid $450,000 to the State of Delaware and $150,000 to William French, the relator in the action; the action was dismissed, and the parties exchanged mutual releases. Noodles & Company did not admit liability or wrongdoing in the settlement.
Other than this action, no litigation is required to be disclosed in this Item.
Source: Item 3 — LITIGATION (FDD page 16)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, Noodles & Company was named as a defendant in a case regarding violations of the Delaware Abandoned Property Law and the Delaware False Claims and Reporting Act. This litigation was settled in August 2018. Noodles & Company paid $450,000 to the State of Delaware and $150,000 to William French, the relator in the action. As part of the settlement, the action was dismissed, and the parties exchanged mutual releases. Importantly, Noodles & Company did not admit liability or wrongdoing in the settlement.
This information is relevant for prospective franchisees as it provides insight into the legal history of Noodles & Company. While the settlement involved a significant payment, the fact that Noodles & Company did not admit liability or wrongdoing could be viewed positively.
It is important for potential franchisees to review Item 3, Litigation, of the FDD to understand the types of legal issues Noodles & Company has faced in the past. Understanding the details of past litigation can help a franchisee assess the potential risks and liabilities associated with investing in a Noodles & Company franchise.