What method does Noodles & Company use to calculate depreciation for property and equipment?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
corded as other restaurant operating costs in the Consolidated Statements of Operations and are expensed as incurred. As of December 31, 2024 and January 2, 2024, smallwares inventory of $6.7 million, was included in the accompanying Consolidated Balance Sheets.
Property and Equipment
Property and equipment are stated at cost, less accumulated depreciation. Expenditures for major renewals and improvements are capitalized, while expenditures for minor replacements and maintenance and repairs are expensed as incurred. Upon retirement or disposal of assets, the accounts are relieved of cost and accumulated depreciation and the related gain or loss is reflected in earnings. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized over the shorter of the estimated useful life or the lease term, which generally includes option periods that are re
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the company calculates depreciation using the straight-line method over the estimated useful lives of the assets. For leasehold improvements, Noodles & Company amortizes them over the shorter of the estimated useful life or the lease term, generally including option periods that are reasonably certain to be exercised.
In 2024, 2023, and 2022, the depreciation and amortization expense on property and equipment, including assets recorded as finance leases, amounted to $29.0 million, $26.7 million, and $23.2 million, respectively. This indicates a significant investment in property and equipment, which is depreciated consistently over its useful life.
The straight-line method evenly distributes the cost of an asset over its useful life, providing a consistent expense each period. This approach simplifies accounting and provides a predictable expense for franchisees. The FDD does not include the estimated useful lives for property and equipment.