What law did the complaint allege Noodles & Company violated?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
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
Source: Item 3 — LITIGATION (FDD page 16)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, a complaint was filed against Noodles & Company alleging violations of the Delaware Abandoned Property Law and the Delaware False Claims and Reporting Act. The complaint stated that Noodles & Company failed to report and deliver unclaimed gift card funds to the State of Delaware. It also alleged that Noodles & Company knowingly made or used false statements and records to conceal, avoid, or decrease an obligation to pay or transmit money to Delaware.
The complaint sought an order for Noodles & Company to cease violating the Delaware False Claims and Reporting Act. It also sought unspecified monetary damages, including treble damages, penalties, and attorneys' fees and costs. The litigation was settled in August 2018, with Noodles & Company paying $450,000 to the State of Delaware and $150,000 to William French, the relator in the action. The action was subsequently dismissed, and both parties exchanged mutual releases.
It is important to note that, as part of the settlement, Noodles & Company did not admit any liability or wrongdoing. Prospective franchisees should be aware of this past litigation and consider its potential implications. While this specific case has been settled, it highlights the importance of compliance with state laws regarding unclaimed property and accurate financial reporting.