What does 'Cost of Sales' include for Noodles & Company, according to the FDD?

According to the 2025 Noodles & Company Franchise Disclosure Document, 'Cost of Sales' encompasses specific expenses related to the products sold at the restaurant. It includes the cost of food, beverages, paper products, and other items directly involved in preparing and selling food and beverages to customers.

For a prospective Noodles & Company franchisee, understanding the components of the 'Cost of Sales' is crucial for financial planning and management. These costs directly impact the profitability of the restaurant. The FDD points out that these costs can vary significantly based on the restaurant's location and potential fluctuations in commodity costs. This means franchisees in different geographic areas may experience different cost of sales due to varying supplier and distributor pricing.

Commodity costs are subject to market conditions and can fluctuate due to various factors like weather, supply chain disruptions, and economic conditions. A Noodles & Company franchisee needs to stay informed about these potential fluctuations and their impact on the cost of sales. Effective cost management strategies, such as negotiating with suppliers and minimizing waste, are essential to maintaining profitability.

The FDD emphasizes that the cost of sales may vary considerably based on location and commodity costs. This variability introduces an element of risk for franchisees, as unexpected increases in these costs can erode profit margins. Therefore, thorough market research and careful budgeting are essential for prospective Noodles & Company franchisees to mitigate these risks and ensure the financial viability of their restaurants.