What is the name of the Delaware act that Noodles & Company was accused of violating?
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
Source: Item 3 — LITIGATION (FDD page 16)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, Noodles & Company was a defendant in a case alleging violations of two Delaware laws. The first was the Delaware Abandoned Property Law, related to the failure to report and deliver unclaimed gift card funds to the state. The second was the Delaware False Claims and Reporting Act, concerning the making or use of false statements to conceal or avoid an obligation to pay money to Delaware.
The complaint against Noodles & Company sought an order to cease violating the Delaware False Claims and Reporting Act, along with unspecified monetary damages, including potential treble damages, penalties, and attorneys' fees and costs. This legal action was settled in August 2018. Noodles & Company paid $450,000 to the State of Delaware and $150,000 to William French, the relator in the action.
The case was subsequently dismissed, with both parties agreeing to 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 implications, although the matter has been resolved.