Does Noodles & Company's decision to maintain separate insurance coverage diminish a franchisee's obligation to maintain their own insurance coverage?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Prior to opening each Noodles & Company Restaurant, and annually thereafter, you must furnish us with such evidence of insurance coverage and payment of premiums as we require. If you fail or refuse to maintain any required insurance coverage, or to furnish satisfactory evidence thereof, we, at our option and in addition to our other rights and remedies hereunder, may obtain such insurance coverage on your behalf. If we do so, you must fully cooperate with us in our effort to obtain such insurance policies and pay us any costs and premiums we incur.
Your obligation to maintain insurance coverage is not diminished in any manner by reason of any separate insurance we may choose to maintain, nor does it relieve you of your obligations under Section 18.02.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, a franchisee's obligation to maintain insurance coverage is not diminished by any separate insurance that Noodles & Company may choose to maintain. The franchisee is still responsible for fulfilling their insurance obligations as outlined in Section 18.02 of the franchise agreement.
Prior to opening a Noodles & Company restaurant and annually thereafter, franchisees must provide evidence of their insurance coverage and premium payments as required by Noodles & Company. If a franchisee fails to maintain the required insurance or provide satisfactory evidence, Noodles & Company has the option to obtain the necessary coverage on the franchisee's behalf. In such cases, the franchisee is obligated to cooperate fully with Noodles & Company and pay all associated costs and premiums.
This requirement ensures that all Noodles & Company restaurants maintain adequate insurance coverage, protecting both the franchisee and the franchisor from potential liabilities. It is a standard practice in franchising to require franchisees to maintain their own insurance, as it provides an additional layer of protection for the brand and the entire franchise system. Franchisees should carefully review Section 18.02 of their franchise agreement to fully understand their insurance obligations.