Under what circumstances is a Noodles & Company franchisee NOT required to indemnify the Indemnitees?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
business cards, stationery, advertising and other materials as we may require from time to time.
You may not make any express or implied agreements, warranties, guarantees or representations or incur any debt in our name or on our behalf or represent that the relationship of the parties hereto is anything other than that of independent contractors. We will not be obligated by or have any liability under any agreements made by you with any third party or for any representations made by you to any third party. We will not be
obligated for any damages to any person or property arising directly or indirectly out of the operation of your business hereunder.
18.02 Indemnification. You agree to indemnify us, our Affiliate and our respective directors, officers, employees, shareholders, agents, successors and assigns (collectively "Indemnitees"), and to hold the Indemnitees harmless to the fullest extent permitted by law, from any and all losses and expenses (as defined below) incurred in connection with any litigation or other form of adjudicatory procedure, claim, demand, investigation, or formal or informal inquiry (regardless of whether it is reduced to judgment) or any settlement thereof which arises directly or indirectly from, or as a result of, a claim of a third party against any one (1) or more of the Indemnitees in connection with the development, ownership, operation or closing of any of your Noodles & Company Restaurants (collectively "Event"), and regardless of whether it resulted from any strict or vicarious liability imposed by law on the Indemnities; provided, however, that this indemnity will not apply to any liability arising from negligent acts of Indemnitees (except to the extent that joint liability is involved, in which event the indemnification provided herein will extend to any finding of comparative or contributory negligence attributable to you). The term "losses and expenses" includes compensatory, exemplary, and punitive damages; fines and penalties; attorneys' fees; experts' fees; court costs; costs associated with investigating and defending against claims; settlement amounts; judgments; compensation for damages to our reputation and goodwill; and all other costs associated with any of the foregoing losses and expenses. We agree to give you reasonable notice of any Event of which we become aware for which indemnification may be required and we may elect (but are not obligated) to direct the defense thereof, provided that the selection of counsel shall be subject to your consent, which consent shall not be unreasonably withheld or delayed.
Source: Item 23 — RECEIPT (FDD pages 99–350)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, a franchisee is generally required to indemnify Noodles & Company and its Indemnitees against losses and expenses arising from third-party claims related to the franchisee's Noodles & Company restaurant. However, this indemnification requirement does not apply if the liability arises from the negligent acts of the Indemnitees themselves. There is an exception to this exception: if joint liability is involved, the franchisee's indemnification obligation will extend to any comparative or contributory negligence attributed to the franchisee.
In addition, Noodles & Company is not obligated to indemnify an Area Operator if Noodles & Company's insurance does not cover the costs of defense, attorney's fees, damages, liability, or settlement amounts associated with any Indemnified Claim or other claim for which the Area Operator is otherwise entitled to indemnification. Furthermore, Noodles & Company's obligation to indemnify, defend, or pay for damages only arises if the Area Operator's insurance coverage does not or would not provide coverage for such claims.
Finally, if the Area Operator fails to obtain and maintain all required insurance policies, and one or more of those policies would have provided coverage for the claim, Noodles & Company is not obligated to indemnify, defend, or pay damages, settlements, or have any liability for such claim. This means it is critical for a Noodles & Company franchisee to maintain the insurance coverage required in their agreements with Noodles & Company.