In this exclusive Franchise Chatter FDD Talk post, you’ll learn the following:

Section I – Estimated initial investment (franchise costs) for a Noodles & Company franchise, based on Item 7 of the company’s 2024 FDD

Section II – Initial franchise fee, royalty fee, and marketing fee for a Noodles & Company franchise, based on Items 5 and 6 of the company’s 2024 FDD

Section III – Number of franchised and company-owned Noodles & Company outlets at the start of the year and the end of the year for 2021, 2022, and 2023, based on Item 20 of the company’s 2024 FDD

Section IV – News updates on the Noodles & Company franchise opportunity

Section V – Presentation and analysis of Noodles & Company’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2024 FDD, including information on the:

• 2023 average, median, high, and low net sales for the 368 company-owned, 90 franchise-owned, and 458 company-owned and franchise-owned Noodles & Company Restaurants open during the entire 52-week period ended January 2, 2024

• 2023 average and median net sales, cost of sales, gross profit, labor, controllable expenses, occupancy cost, non-controllable expenses, and restaurant EBITDA for the 371 company-owned Noodles & Company Restaurants open during the entire 52-week period ended January 2, 2024

Section VI – Key ratios, comparables, computations, and analyses for the Noodles & Company franchise opportunity (exclusive content for Platinum subscribers)

Section I – Noodles & Company Franchise Costs

• Leasehold Improvements:  $186,000 to $1,084,000
• Architectural and Other Design Fees:  $49,000 to $125,000
• Landlord Credits:  ($58,000) to ($150,000)
• Kitchen Equipment:  $161,000 to $233,000
• Millwork and Furniture:  $28,000 to $69,000
• Computer Equipment:  $30,000 to $75,000
• Signage:  $27,000 to $79,000
• Permits and Licenses:  $1,000 to $26,000
• Supplies and Smallwares:  $6,000 to $11,000
• Opening Inventory:  $6,000 to $10,000
• Safe and Cash on Hand in Registers:  $1,000 to $3,000
• Utilities:  $0 to $5,000
• Pre-Opening Cash Occupancy Costs:  $0 to $8,000
• Training:  $28,000 to $108,000
• Grand Opening Marketing Program:  $5,000 to $15,000
• Legal Expenses:  $0
• Additional Funds – 3 Months:  $0 to $28,000
• Franchise Fee:  $35,000
• Total Estimated Noodles & Company Franchise Costs:  $621,000 to $2,064,000

Section II – Noodles & Company’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Franchise Fee:  $35,000
• Royalty:  5.0% of Net Royalty Sales
• Advertising Brand Development Fund:  currently 0.0% of Net Royalty Sales
• Field Marketing Funds:  currently 1.0% of Net Royalty Sales
• Marketing Administration Fee:  currently 1.25% of Net Royalty Sales

Section III – Number of Franchised and Company-Owned Noodles & Company Outlets

Franchised

2021

• Outlets at the Start of the Year:  76
• Outlets at the End of the Year:  76
• Net Change:  0

2022

• Outlets at the Start of the Year:  76
• Outlets at the End of the Year:  93
• Net Change:  +17

2023

• Outlets at the Start of the Year:  93
• Outlets at the End of the Year:  90
• Net Change:  -3

Company-Owned

2021

• Outlets at the Start of the Year:  378
• Outlets at the End of the Year:  372
• Net Change:  -6

2022

• Outlets at the Start of the Year:  372
• Outlets at the End of the Year:  367
• Net Change:  -5

2023

• Outlets at the Start of the Year:  367
• Outlets at the End of the Year:  380
• Net Change:  +13

Section IV – News Updates on the Noodles & Company Franchise

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Noodles & Company Franchise (Item 19, 2024 FDD)

• Noodles & Company is providing statements of and information regarding average and median net sales of company and franchise Restaurants for its 2023 fiscal year. Noodles & Company is also providing statements of and information regarding restaurant contribution to gross profit and restaurant EBITDA of company Restaurants in its 2023 fiscal year.

Part 1 – Statement of and Information Regarding Average and Median Net Sales of Noodles & Company Restaurants for the 52-Week Period Ended January 2, 2024

• As of January 2, 2024, Noodles & Company operated 380 domestic company-owned Restaurants, and there were 90 franchise-owned Restaurants, for a total of 470 Restaurants.

• However, the Statement of Average and Median Net Sales consists of averages and medians of the reported Net Sales only for those Restaurants open during the preceding 52-week period. Therefore, the Restaurants that were excluded were those that opened in 2023.

• 368 company-owned Restaurants were open and operating during the 52-week period. There were also 90 franchise-owned Restaurants open and operating during the 52-week period, for a total of 458. The remaining Restaurants were not open for the full preceding 52-week period because they did not open until 2023.

• In 2023, Noodles & Company permanently closed 4 company-owned Restaurants (none of which had been open less than 12 months) and 3 franchise-owned Restaurants closed.

Company and Franchise Net Sales

• Average Net Sales:  $1,312,223
• Median Net Sales:  $1,281,482
• High Net Sales:  $2,697,069
• Low Net Sales:  $617,064

Company Net Sales

• Average Net Sales:  $1,334,085
• Median Net Sales:  $1,289,074
• High Net Sales:  $2,697,069
• Low Net Sales:  $617,064

Franchise Net Sales

• Average Net Sales:  $1,237,112
• Median Net Sales:  $1,156,277
• High Net Sales:  $2,151,198
• Low Net Sales:  $696,236

• 210 of the 458 Noodles & Company restaurants used for calculating the Average and Median Net Sales for the period referenced above, or 45.7%, attained or surpassed the Average Net Sales of $1,312,223.

• 166 of the 371 company-owned Restaurants used for calculating the Company Average and Median Net Sales, or 45.1%, attained or surpassed the Average Net Sales of $1,334,085.

• 40 of the 92 franchise-owned Restaurants used for calculating the Franchise Average and Median Net Sales, or 43.5%, attained or surpassed the Average Net Sales of $1,237,112.

• Net Sales is defined for this Statement as the aggregate amount of all sales of food, beverages, and other products sold in or by a Noodles & Company Restaurant during the entire 52-week reporting period ended January 2, 2024 whether for cash or credit, but excluding: (1) all federal, state, or municipal sales or service taxes collected from customers and paid to the appropriate taxing authorities, (2) all coupons, promotions, discounts, refunds, employee discounts, or other adjustments made by Noodles & Company Restaurants, and (3) adjusted for temporarily closed Restaurants.

• Net Sales may not be the same as Net Royalty Sales as the term is defined in the Franchise Agreement.

• The financial performance representation figures do not reflect the costs of sales, operating expenses, or other costs or expenses, that must be deducted from the gross revenue or gross sales figures to obtain your net income or profit.

Part 2 – Statement of and Information Regarding Restaurant Contribution to Gross Profit and Restaurant EBITDA of Company-Owned Restaurants for the 53-Week Period Ended January 2, 2024

• This Statement consists of the averages and medians of 371 company-owned Restaurants open as company Restaurants during the 52-week period ended January 2, 2024 and excludes those Restaurants that the company closed in 2023.

• Net Sales is defined for this Statement as the aggregate amount of all sales of food, beverages, and other products sold in or by a Noodles & Company Restaurant during the entire 52-week reporting period ended January 2, 2024 whether for cash or credit, but excluding: (1) all federal, state, or municipal sales or service taxes collected from customers and paid to the appropriate taxing authorities, (2) all coupons, promotions, discounts, refunds, employee discounts, or other adjustments made by Noodles & Company Restaurants, and (3) adjusted for temporarily closed Restaurants.

• Net Sales may not be the same as Net Royalty Sales as the term is defined in the Franchise Agreement.

• Cost of Sales includes the cost of food, beverages, paper, and other products included in the preparation and sale of food, beverages, and other products to customers. The cost of sales may vary considerably based on where a Restaurant is located within the geographical area serviced by the company’s approved suppliers and distributors, and based on potential fluctuations in commodity costs.

• Labor includes wages paid to management and employees of the Restaurant, including restaurant managers and shift supervisors, management bonuses, payroll taxes, health insurance, workers’ compensation, vacation and other employee benefits. This amount does not include wages or overhead from the Noodles & Company Central Support Office.

• Controllable Expenses include repairs and maintenance, small wares, third-party delivery fees, cleaning supplies, office supplies, trash removal, uniforms, employee activities, and other miscellaneous operating expenses.

• Occupancy Cost includes base rent, percentage rent, common area maintenance, real estate taxes, and other miscellaneous lease expenses.

• Non-Controllable Expenses include personal property taxes, credit card processing fees, bank charges, restaurant marketing, leased equipment and licenses, utilities, insurance, and other miscellaneous fixed expenses.

• Restaurant EBITDA means Restaurant contribution to profit before interest expense, income taxes, depreciation, and amortization. Calculation of Restaurant EBITDA for this Statement excludes the 5.0% Royalty Fee, which these Restaurants are not charged.

• The median EBITDA of company-owned restaurants is $171,322.

• Because the Noodles & Company Restaurants whose results appear below are company-operated Restaurants, they paid no Royalties. You must consider your Restaurant’s required Royalty payment (currently 5.0% of Net Royalty Sales) as part of its expected operating expenses.

• The annual Royalty Fee your restaurant would have been required to pay had it achieved the average Net Sales level reflected in the table below showing a Summary Profit and Loss Statement is identified in the table below entitled “Annual Franchise Expense Not Encompassed in Table Above.”

Average Amount

• Number of Restaurants:  371

• Net Sales:  $1,334,085 (100.0%)

• Cost of Sales:  $335,729 (25.2%)

• Gross Profit:  $998,356 (74.8%)

• Labor:  $423,198 (31.7%)

• Controllable Expenses:  $1,738,756 (13.0%)

• Occupancy Cost:  $124,300 (9.3%)

• Non-Controllable Expenses:  $73,777 (5.5%)

• Restaurant EBITDA:  $203,206 (15.2%)

Median Amount

• Number of Restaurants:  371

• Net Sales:  $1,289,074 (100.0%)

• Cost of Sales:  $326,360 (25.3%)

• Gross Profit:  $962,715 (74.7%)

• Labor:  $422,425 (32.8%)

• Controllable Expenses:  $170,476 (13.2%)

• Occupancy Cost:  $119,604 (9.3%)

• Non-Controllable Expenses:  $73,261 (5.7%)

• Restaurant EBITDA:  $176,948 (13.7%)

Annual Franchise Expense Not Encompassed in Table Above (Assuming Average Annual Net Sales)

• Royalties (5.0% of Net Sales):  $66,704

Section VI – Noodles & Company Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️