What costs are NOT reflected in the Noodles & Company financial performance representation figure?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
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- The financial performance representation figure does not reflect the costs of sales, operating expenses or other costs or expenses that must be deducted
from the gross revenue or gross sales figures to obtain your net income or profit. You should conduct an independent investigation of the costs and expenses you will incur in operating your Noodles & Company restaurant. Franchisees or former franchisees, listed in the disclosure document, may be one source of this information.
Source: Item 19 — FINANCIAL PERFORMANCE REPRESENTATIONS (FDD pages 84–89)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the financial performance representation does not include all the costs a franchisee will incur. Specifically, the representation does not reflect the costs of sales, operating expenses, or other costs that must be deducted from gross revenue to determine net income or profit. This means that while the Item 19 provides data on average and median net sales, gross profit, and restaurant EBITDA, it does not present a complete picture of a franchisee's potential profitability because it omits several categories of expenses.
For a prospective Noodles & Company franchisee, this exclusion is significant. It highlights the importance of conducting an independent investigation into all potential costs and expenses associated with operating a Noodles & Company restaurant. The FDD suggests consulting with current or former franchisees to gather more detailed information on these costs. Understanding these expenses is crucial for developing realistic financial projections and assessing the viability of the franchise investment.
Furthermore, the FDD explicitly states that the financial performance representation excludes royalties, interest on financing, income taxes, depreciation, and amortization. These are substantial costs that can significantly impact a franchisee's bottom line. The royalty fee alone is 5.0% of Net Royalty Sales. Given these exclusions, prospective franchisees should carefully consider these factors and seek professional financial advice to accurately estimate their potential earnings and expenses. The financial performance representation should be viewed as a starting point, not a comprehensive forecast of financial outcomes.