Is there a specific definition of 'Damages' referenced in the Noodles & Company agreement related to indemnification?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding anything to the contrary in this Agreement, in the event that Noodles & Company's insurance does not cover either the costs of defense or
attorney's fees, or any portion of them, or damages, liability or settlement amounts, or any portion of them, associated with any Indemnified Claim or other claim for which Area Operator is otherwise entitled to indemnification, Noodles & Company is not obligated to indemnify Area Operator to the extent that Noodles & Company's insurance does not provide coverage. Furthermore, Noodles & Company's obligation to indemnify, defend or pay for damages of any claim for which Area Operator would otherwise be entitled to indemnification arises only if and to the extent that Area Operator's insurance coverage does not or would not (absent any right to indemnification by Noodles & Company) provide coverage for such claims. In the event that Area Operator has failed to obtain and keep in force all policies that it is obligated to carry under the terms of its agreements with Noodles & Company and one or more of such policies would or could have provided coverage for the claim, then Noodles & Company is not obligated to indemnify, defend or pay damages, settlements, or have any liability for such claim.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, there is no explicit definition of 'Damages' provided within the context of indemnification. However, the FDD does address circumstances under which Noodles & Company is obligated to indemnify an Area Operator. Specifically, Noodles & Company is not obligated to provide indemnification if their insurance does not cover the costs of defense, attorney's fees, damages, liability, or settlement amounts related to an indemnified claim.
Furthermore, Noodles & Company's obligation to indemnify, defend, or pay for damages only arises if the Area Operator's insurance coverage does not provide coverage for such claims. If the Area Operator fails to maintain the required insurance policies, and those policies could have covered the claim, Noodles & Company is not obligated to indemnify, defend, or pay damages or settlements.
While the term 'damages' is used in the context of indemnification, the FDD does not provide a specific definition of what constitutes 'damages.' A prospective franchisee should seek clarification from Noodles & Company regarding the types of damages covered under the indemnification clause and the specific circumstances under which indemnification would apply.