For the Noodles & Company financial performance representation, what is excluded from the definition of Net Sales?

According to the 2025 Noodles & Company Franchise Disclosure Document, the financial performance representation defines Net Sales as the aggregate amount of all sales of food, beverages, and other products sold in or by a Noodles & Company restaurant during the 52-week reporting period ending December 31, 2024, whether the sales are for cash or credit. However, this definition specifically excludes certain items.

Specifically, the following are excluded from the Net Sales figure: (1) all federal, state, or municipal sales or service taxes collected from customers and paid to the appropriate taxing authorities, (2) all coupons, promotions, discounts, refunds, employee discounts, or other adjustments made by Noodles & Company restaurants, and (3) adjustments for temporarily closed restaurants. This means that the Net Sales figure presented does not include any taxes collected on behalf of government entities or any reductions in price offered to customers or employees.

It is important for a prospective Noodles & Company franchisee to understand exactly what is included and excluded from the Net Sales definition, as this figure is used to calculate royalties and other fees payable to the franchisor. Furthermore, the FDD explicitly states that Net Sales may not be the same as Net Royalty Sales as defined in the Franchise Agreement. Therefore, potential franchisees should carefully review the Franchise Agreement to understand how Net Royalty Sales are defined and calculated, as this figure will directly impact their royalty obligations.