What is Noodles & Company's liability for losses or costs resulting from emergency procedures, including restaurant closure?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
5.02 Indemnification. You agree to indemnify us, our Affiliates and our respective directors, officers, employees, shareholders, agents, successors, and assigns (collectively "Indemnitees"), and to hold the Indemnitees harmless to the fullest extent permitted by law, from any and all losses and expenses (as defined below) incurred in connection with any litigation or other form of adjudicatory procedure, claim, demand, investigation, formal or informal inquiry (regardless of whether it is reduced to judgment) or any settlement thereof which arises directly or indirectly from, or as a result of, a claim of a third party against any one or more of the Indemnitees in connection with the development, ownership, operation or closing of any of your Noodles & Company restaurants (collectively "Event"), and regardless of whether it resulted from any strict or vicarious liability imposed by law on the Indemnitees, provided, however, that this indemnity will not apply to any liability arising from the negligent acts of Indemnitees (except to the extent that joint liability is involved, in which event the indemnification provided herein will extend to any finding of comparative or contributory negligence attributable to you). The term "losses and expenses" includes compensatory, exemplary, and punitive damages; fines and penalties; attorneys' fees; experts' fees; court costs; costs associated with investigating and defending against claims; settlement amounts; judgments; compensation for damages to our reputation and goodwill; and all other costs associated with any of the foregoing losses and expenses. We agree to give you reasonable notice of any Event of which we become aware for which indemnification may be required and we may elect (but are not obligated) to direct the defense thereof,
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
The 2025 Noodles & Company Franchise Disclosure Document (FDD) outlines the franchisee's responsibility to indemnify Noodles & Company and related parties from losses and expenses. This indemnification covers claims arising from the development, ownership, operation, or closing of a Noodles & Company restaurant. This means that a franchisee could be responsible for covering Noodles & Company's losses and expenses if a third party makes a claim related to the restaurant.
The franchisee's obligation to indemnify Noodles & Company extends to a wide range of costs, including compensatory, exemplary, and punitive damages, fines, penalties, attorney's fees, expert fees, court costs, investigation costs, settlement amounts, judgments, and compensation for damage to Noodles & Company's reputation and goodwill. However, the franchisee is not responsible for liability arising from the negligent acts of Noodles & Company, unless joint liability is involved, in which case the franchisee's indemnification extends to their share of negligence.
Noodles & Company is required to provide the franchisee with reasonable notice of any event that may require indemnification and may choose to direct the defense, subject to the franchisee's approval of the counsel. This section of the FDD highlights the importance of insurance coverage, as it is the franchisee's responsibility to maintain adequate insurance. Failure to do so allows Noodles & Company to obtain coverage on the franchisee's behalf, with the franchisee bearing the costs and premiums. This underscores the need for franchisees to understand their insurance requirements and maintain appropriate coverage to protect themselves from potential liabilities.