What financial metric does Noodles & Company's CODM use to evaluate performance?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company's Chief Operating Decision Maker ("CODM") is the senior executive team that includes the Chief Executive Officer, the Chief Financial Officer and the Chief Operating Officer. The Company has one reportable operating segment. The reportable operating segment is comprised of one operating segment, which has been aggregated to a single operating segment in consideration of the aggregation criteria set forth in ASC 280. The one reportable segment derives its revenue from companyowned restaurants and franchise owned restaurants. No guest accounts for 10% or more of the Company's revenues. The Company's CODM uses income (loss) from operations to evaluate performance and make key operating decisions, such as deciding the rate at which we invest resources into the segment.
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company's Chief Operating Decision Maker (CODM), which includes the CEO, CFO, and COO, uses income (loss) from operations to evaluate the performance of its single reportable segment. This segment comprises both company-owned and franchise-owned restaurants.
This means that when Noodles & Company's leadership team assesses how well the business is doing, they primarily look at the income or loss generated from the daily operations of all restaurants, both company-owned and franchised. This metric helps them make important decisions about where to invest resources.
For a potential franchisee, this indicates that the overall profitability of Noodles & Company's restaurant operations is a key factor in the franchisor's strategic decisions. Understanding how the company defines and calculates "income (loss) from operations" would be crucial for a franchisee to align their expectations and business strategies with the franchisor's goals. This also highlights the importance of efficient restaurant management and cost control to contribute positively to the company's overall operational income.