factual

What does the 'additional funds' amount represent in the estimated initial investment for a Noodles & Company franchise?

Noodles_Company Franchise · 2025 FDD

Answer from 2025 FDD Document

    1. This amount represents additional funds needed to cover operating expenses beyond revenue generated for the first three months after opening. The amounts shown are based on the actual experience of our restaurants in our 2024 fiscal year. On average, the restaurants included above did not require the use of additional funds during their three months of operations, but instead generated positive cash flow, which we have not included in the above table. The need for additional funds varies depending on a variety of factors. These Additional Funds may be used for restaurant-level employee wages and benefits, point of purchase collateral, other marketing costs, insurance, maintenance, linens, cleaning and office supplies, leased equipment, occupancy expenses and credit card processing fees, among other costs. These estimates do not include training expenses, general and administrative or area manager salaries or any payment to you. We do not represent that these additional costs will be your only departure from our costs. Further, we do not represent that your first three months of operating performance will be commensurate with ours. We experience wide fluctuations in development costs and in performance, particularly in the first three months after opening.
    1. These estimates also do not take into account the finance charges, interest and related costs you may incur if any portion of your initial investment is debt financed.
    1. You should review these figures carefully with a business advisor before making any decision to purchase the franchise. We do not offer any financing directly or indirectly for any part of the initial investment.

Source: Item 7 — ESTIMATED INITIAL INVESTMENT (FDD pages 23–27)

What This Means (2025 FDD)

According to Noodles & Company's 2025 Franchise Disclosure Document, the 'additional funds' listed in the estimated initial investment represent the funds needed to cover operating expenses beyond the revenue generated during the first three months of operation. The FDD indicates that these additional funds may range up to $56,000.

These funds are intended to cover costs such as restaurant-level employee wages and benefits, point of purchase collateral, other marketing costs, insurance, maintenance, linens, cleaning and office supplies, leased equipment, occupancy expenses, and credit card processing fees. However, these estimates do not include training expenses, general and administrative or area manager salaries, or any payment to the franchisee themselves.

The FDD notes that, on average, the company-owned restaurants used to develop these estimates did not require additional funds during their first three months due to positive cash flow. However, the need for additional funds can vary significantly based on various factors, and Noodles & Company does not guarantee that a franchisee's first three months of operating performance will match theirs. Prospective franchisees should carefully review these figures with a business advisor, considering that these estimates also do not account for finance charges, interest, and related costs if any portion of the initial investment is debt-financed.

Disclaimer: This information is extracted from the 2025 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.