What was the effective income tax rate for Noodles & Company in 2024?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
l provision for income taxes | $ | 54 | $ 24 | $ 37 |
The reconciliation of income tax provision (benefit) that would result from applying the federal statutory rate to pre-tax income as shown in the accompanying Consolidated Statements of Operations is as follows for 2024, 2023 and 2022 (in thousands):
| 2024 | 2023 | 2022 | |
|---|---|---|---|
| Federal income tax benefit at federal rate | $ (7,730) | $ (2,065) | $ (688) |
| State income tax benefit, net of federal tax | (1,793) | (420) | (112) |
| Other permanent differences | 783 | 629 | 368 |
| Tax credits | (1,400) | (1,51 |
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the effective income tax rate for the company in 2024 was (0.1)%. This figure reflects the overall impact of income taxes on the company's financial performance for that year. It's important to note that this rate can differ significantly from the statutory tax rate due to various factors.
The document also provides a breakdown of several components that contribute to the final provision for income taxes. These include the federal income tax benefit at the federal rate which was a benefit of $(7,730), state income tax benefit net of federal tax which was a benefit of $(1,793), other permanent differences of $783, tax credits of $(1,400), a change in valuation allowance of $9,484, a tax rate change of $74, a deferred tax asset write-off of $630, and other net items of $6. All these items ultimately resulted in a provision for income taxes of $54.
For a prospective franchisee, understanding the effective income tax rate of Noodles & Company can offer insights into the financial health and tax planning strategies of the company. While franchisees do not directly pay Noodles & Company's corporate income taxes, the company's profitability and tax efficiency can influence its ability to support franchisees and invest in the brand. Reviewing these figures over several years, as presented in the table, can provide a more comprehensive understanding of the company's tax situation and its potential impact on the franchise system.