Besides a cease and desist order, what other remedies were sought against Noodles & Company?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
13C-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
Source: Item 3 — LITIGATION (FDD page 16)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, in the case The State of Delaware, William French v. Card Compliant, LLC, et. al., the complaint sought remedies beyond just a cease and desist order. Specifically, the complaint requested unspecified monetary damages, which included treble damages as stipulated under the Delaware False Claims and Reporting Act. Additionally, the plaintiffs sought penalties, attorneys' fees, and costs from Noodles & Company.
The case was settled in August 2018, with Noodles & Company agreeing to pay $450,000 to the State of Delaware and $150,000 to William French, the relator. While the action was dismissed and mutual releases were exchanged, Noodles & Company did not admit any liability or wrongdoing as part of the settlement. This resolution allowed Noodles & Company to avoid further legal expenses and potential reputational damage that could have arisen from a prolonged court battle.
It is important to note that the FDD states that no other litigation is required to be disclosed in Item 3, suggesting that this case was the only one meeting the disclosure threshold. For a prospective franchisee, this litigation history provides insight into the types of legal challenges Noodles & Company has faced and how they were resolved. While the settlement amount is significant, the absence of an admission of liability and the resolution of the case are positive factors. However, prospective franchisees should consider the potential for similar legal challenges in the future and factor in the associated risks and costs.