Does the prevailing party in a Noodles & Company agreement dispute recover costs of suit?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.03 Attorneys' Fees. If any party brings action against another party, with respect to the subject matter of this Agreement, the prevailing party, if any, shall be entitled to recover from the adverse party all of the reasonable expenses of the prevailing party, including attorney fees.
- 19.04 Governing Law. Except to the extent governed by the United States Trademark Act of 1946 (Lanham Act, 15 U.S.C. 1051 et seq.) or other federal law, this Agreement shall be interpreted under the laws of the State of Colorado, excluding its choice of laws rules. This Agreement shall be construed under the laws of the State of Colorado, provided the foregoing shall not constitute a waiver of any of your rights under any applicable franchise law of another state. Otherwise, in the event of any conflict of law, Colorado law will prevail, without regard to its conflict of law principles. However, if any provision of this Agreement would not be enforceable under Colorado law, and if your Noodles & Company Restaurant is located outside of Colorado and such provision would be enforceable under the laws of the state in which your Noodles & Company Restaurant is located, then such provision shall be construed under the laws of that state. Nothing in this Section 19 is intended to subject this Agreement to any franchise or similar law, rule or regulation of the State of Colorado to which it otherwise would not be subject.
19.05 Limitations on Legal Actions.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, if a party brings legal action against another party regarding the franchise agreement, the prevailing party is entitled to recover all reasonable expenses, including attorney fees, from the losing party. This means that if a Noodles & Company franchisee sues Noodles & Company, or vice versa, the party that wins the lawsuit can recover the attorney's fees and other expenses incurred during the legal proceedings.
This provision can significantly impact a franchisee's decision to pursue legal action. While it offers the potential benefit of recovering legal costs if successful, it also carries the risk of having to pay the other party's legal fees if the franchisee loses. This arrangement is fairly standard in franchise agreements, as it aims to discourage frivolous lawsuits and encourage parties to resolve disputes amicably.
However, it's important to note that Noodles & Company's franchise agreement also includes a clause stating that if Noodles & Company files a claim to enforce the agreement and prevails, the franchisee agrees to reimburse Noodles & Company for all its costs and expenses, including reasonable attorneys' fees. This clause reinforces Noodles & Company's ability to recover costs in specific enforcement actions, potentially creating an imbalance in favor of the franchisor. Prospective franchisees should carefully consider these clauses and their potential financial implications before entering into an agreement with Noodles & Company.