How does the Noodles & Company CODM utilize income (loss) from operations in their decision-making process?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's Chief Operating Decision Maker ("CODM") is the senior executive team that includes the Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer. The Company has one reportable operating segment. The reportable operating segment is comprised of one operating segment, which has been aggregated to a single operating segment in consideration of the aggregation criteria set forth in ASC 280. The one reportable segment derives its revenue from companyowned restaurants and franchise owned restaurants. No guest accounts for 10% or more of the Company's revenues. The Company's CODM uses income (loss) from operations to evaluate performance and make key operating decisions, such as deciding the rate at which we invest resources into the segment.
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company's Chief Operating Decision Maker (CODM), which includes the senior executive team (CEO, CFO, and COO), uses income (loss) from operations to assess performance and guide key operational decisions. Specifically, the CODM uses this financial metric to determine the rate at which Noodles & Company invests resources into its single reportable operating segment. This segment encompasses both company-owned and franchise-owned restaurants.
For a prospective Noodles & Company franchisee, this means that the financial performance of both company-owned and franchised locations directly influences the strategic decisions made by the company's leadership. Strong operational income may lead to increased investment in areas such as marketing, technology, or restaurant development, potentially benefiting all franchisees. Conversely, operational losses could result in reduced investment or cost-cutting measures.
It's important to note that Noodles & Company operates as one reportable segment, meaning that the financial performance of all restaurants is considered collectively. This approach contrasts with some franchise systems that may break down performance by region or type of location. The FDD indicates that no single guest accounts for 10% or more of the company's revenues. This suggests a diversified customer base, reducing reliance on any one individual or entity.