What does Noodles & Company consider to be cash equivalents?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
ed amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investment instruments with an initial maturity of three months or less when purchased to be cash equivalents. Amounts receivable from credit card processors are converted to cash shortly after the related sales transaction and are considered to be cash equivalents because they are both short-term and highly liquid in nature. Amounts receivable from credit card processors as of December 31, 2024 and January 2, 2024, which are included in cash and cash equivalents, were $0.8 million and $2.4 million, respectively. Additionally, the Company records "bo
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company has specific criteria for classifying investments as cash equivalents. Noodles & Company considers highly liquid investment instruments with an initial maturity of three months or less to be cash equivalents. This means that any investment that can be quickly converted into cash within a short timeframe is categorized as such.
Additionally, amounts receivable from credit card processors are also treated as cash equivalents. These receivables are converted to cash shortly after the sales transaction occurs. The FDD notes that as of December 31, 2024, and January 2, 2024, the amounts receivable from credit card processors included in cash and cash equivalents were $0.8 million and $2.4 million, respectively.
Noodles & Company also records "book overdrafts" when outstanding checks at year end exceed the cash and cash equivalents. These overdrafts are recorded within accounts payable on the Consolidated Balance Sheets and within operating activities on the Consolidated Statements of Cash Flows. Understanding these classifications is important for prospective franchisees as it provides insight into how Noodles & Company manages and reports its liquid assets and short-term obligations.