Under what circumstances does the waiver of punitive and exemplary damages NOT apply to Noodles & Company franchisees?

According to Noodles & Company's 2025 Franchise Disclosure Document, the waiver of punitive and exemplary damages does not apply to franchisees under specific circumstances. Generally, Noodles & Company and its franchisees waive any right to claim punitive or exemplary damages against each other. However, this waiver has exceptions.

The waiver does not apply to a franchisee's obligations regarding the use of Noodles & Company's Marks, as detailed in Section 5 of the franchise agreement. This means that if a franchisee misuses Noodles & Company's trademarks or branding, the franchisor retains the right to seek punitive or exemplary damages. Similarly, the waiver does not apply to a franchisee's obligations concerning confidential information, as outlined in Section 7.01 of the franchise agreement. If a franchisee breaches the confidentiality clauses, Noodles & Company can pursue punitive or exemplary damages.

In practical terms, this means that while franchisees are generally protected from facing punitive damages in disputes with Noodles & Company, they are not protected if they misuse the company's trademarks or disclose confidential information. This provision encourages franchisees to protect the brand's intellectual property and maintain confidentiality, as breaches in these areas can lead to significant financial penalties. Franchisees should ensure they fully understand their obligations under Sections 5 and 7.01 of the franchise agreement to avoid potential exposure to punitive damages.