If Noodles & Company obtains an injunction against a franchisee, what is the franchisee's sole remedy?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
claims for damages by reason of the wrongful issuance of any such injunction being expressly waived). You and each of your Owners acknowledge that any violation of Section(s) 5, 7, 9, 11, 14, 15 and/or 16, but not limited to these Sections, would result in irreparable injury to us for which no adequate remedy at law may be available. Accordingly, you and each of your Owners consent to the issuance of an injunction prohibiting any conduct in violation of any of those Sections and agree that the existence of any claim you or any of your Owners may have against us, whether arising from this Agreement, shall not constitute a defense to the enforcement of any of those Sections.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, if Noodles & Company obtains an injunction against a franchisee, the franchisee's sole remedy is expressly waived regarding claims for damages resulting from the injunction's issuance. This means that if Noodles & Company seeks and receives an injunction against a franchisee for violating the franchise agreement, the franchisee cannot sue Noodles & Company for damages allegedly caused by the injunction, even if the injunction is later determined to have been wrongfully issued. This waiver applies to the franchisee and their owners.
This provision significantly limits a franchisee's legal recourse in the event of an injunction. Typically, a party subject to an injunction might seek damages if the injunction proves to be unwarranted or causes financial harm. However, under this agreement, Noodles & Company franchisees give up that right.
The FDD also states that violations of certain sections of the agreement, including those related to non-competition and confidentiality, would result in irreparable injury to Noodles & Company, further justifying the use of injunctive relief. The franchisee also agrees that any claims they may have against Noodles & Company will not be a defense to the enforcement of these sections. This underscores the importance of understanding and adhering to the terms of the franchise agreement, as the consequences of non-compliance can be severe and with limited legal recourse.
A prospective franchisee should carefully consider this provision and seek legal counsel to fully understand its implications. They should also assess their own risk tolerance and ability to comply with all aspects of the franchise agreement to minimize the likelihood of facing such a situation.