What is the name of the Delaware law 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 FDD, Noodles & Company was named as a defendant in a case alleging violations of two Delaware laws. The first law is the Delaware Abandoned Property Law, regarding the reporting and delivery of unclaimed gift card funds to the state. The second law is the Delaware False Claims and Reporting Act, concerning the making or use of false statements or records to conceal or avoid an obligation to pay money to Delaware.
The complaint alleged that Noodles & Company knowingly violated these laws. The state sought an order for Noodles & Company to cease violating the Delaware False Claims and Reporting Act, along with unspecified monetary damages, penalties, and attorney's fees.
In August 2018, Noodles & Company settled the litigation by paying $450,000 to the State of Delaware and $150,000 to William French, the relator in the action. The case was subsequently dismissed, and both parties exchanged mutual releases. It is important to note that Noodles & Company did not admit any liability or wrongdoing as part of the settlement.