What was the amount of deferred franchise revenue for Noodles & Company in 2024 (in thousands)?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
Deferred revenue related to the rewards was $1.0 million and $0.9 million as of December 31, 2024 and January 2, 2024, respectively, and was included in accrued expenses and other current liabilities in the Consolidated Balance Sheets.
Initial fees received from franchisees are recognized as revenue over the term of each respective franchise agreement, which is typically 20 years. The Company recognized revenue of $0.3 million, $0.2 million and $0.1 million in 2024, 2023 and 2022, respectively related to initial fees from franchisees that were included in the contract liability balance at the beginning of the year. The Company expects to recognize approximately $0.1 million each fiscal year through fiscal 2029 and approximately $0.6 million thereafter related to performance obligations that are unsatisfied as of December 31, 2024.
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, deferred revenue related to the rewards program was $1.0 million as of December 31, 2024. This deferred revenue stems from the Noodles Rewards program, where members accumulate points redeemable for rewards like free products. Noodles & Company defers recognizing revenue associated with these points, net of estimated points that will not be redeemed.
These points typically expire after six months, and the revenue is recognized when the reward points are actually redeemed. This deferred revenue is included in accrued expenses and other current liabilities on the Consolidated Balance Sheets. The document also mentions that initial fees received from franchisees are recognized as revenue over the term of each respective franchise agreement, which is typically 20 years.
In 2024, Noodles & Company recognized revenue of $0.3 million related to initial fees from franchisees that were included in the contract liability balance at the beginning of the year. The company anticipates recognizing approximately $0.1 million each fiscal year through 2029 and approximately $0.6 million thereafter related to performance obligations that are unsatisfied as of December 31, 2024.
For a prospective franchisee, this indicates that Noodles & Company manages its revenue recognition carefully, particularly regarding loyalty programs and franchise fees. The deferred revenue figures reflect the company's obligations to provide future goods or services for which it has already received payment or consideration.