What factors can cause the 'Cost of Sales' to vary for a Noodles & Company restaurant?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
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- Cost of Sales includes the cost of food, beverages, paper and other products included in the preparation and sale of food, beverages and other products to customers. The cost of sales may vary considerably based on where a restaurant is located within the geographical area serviced by our approved suppliers and distributors and based on potential fluctuations in commodity costs.
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 'Cost of Sales' for a Noodles & Company restaurant can fluctuate based on several factors. The primary components included in the 'Cost of Sales' are the expenses related to food, beverages, paper products, and other items used in preparing and selling products to customers. This means that the price a franchisee pays for ingredients and supplies directly impacts this cost.
The FDD indicates that one significant factor influencing the 'Cost of Sales' is the restaurant's geographical location. The cost can vary depending on where the Noodles & Company restaurant is situated within the area serviced by the company's approved suppliers and distributors. This suggests that transportation costs and regional pricing differences among suppliers can play a role. Therefore, a restaurant located further from a supplier's distribution center might incur higher costs due to increased shipping fees.
Another factor that can cause the 'Cost of Sales' to vary is potential fluctuations in commodity costs. Commodity costs refer to the market prices of raw materials like wheat, dairy, and meat, which are essential ingredients in Noodles & Company's menu items. These prices can be volatile and subject to change due to various factors, including weather conditions, global demand, and economic trends. If commodity costs increase, the 'Cost of Sales' for a Noodles & Company restaurant will likely rise, impacting the restaurant's profitability.