What is the significance of William French's role as the 'relator' in the action against Noodles & Company?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
13C-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 Noodles & Company's 2025 Franchise Disclosure Document, William French was the 'relator' in a case against Noodles & Company regarding the Delaware Abandoned Property Law. A relator is a private individual who brings a lawsuit on behalf of the government, typically in cases involving fraud or false claims. In this instance, French's complaint alleged that Noodles & Company 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 significance of French's role as the relator is that he initiated the legal action that led to Noodles & Company paying $450,000 to the State of Delaware and $150,000 to French himself as part of a settlement reached in August 2018. The fact that Noodles & Company settled the case, even without admitting liability or wrongdoing, suggests that there was some merit to the claims brought by French.
For a prospective franchisee, this litigation highlights the importance of compliance with state laws regarding abandoned property and gift cards. It also demonstrates the potential financial risks associated with failing to properly report and deliver unclaimed funds. While this specific case was settled, similar actions could arise in other jurisdictions, making it crucial for franchisees to maintain accurate records and adhere to all applicable regulations. Franchisees should seek clarification from Noodles & Company regarding their policies and procedures for handling unclaimed property and gift card funds to avoid similar legal issues.