What was the net value of Noodles & Company's operating lease assets in 2023?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
t for lease and non-lease components as a single component for substantially all lease types.
As most of the Company's leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments.
Changes in the market trend of the trade area affected certain of our restaurant oper
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company recorded right-of-use asset impairment charges that reduced the carrying value of operating lease assets to their respective estimated fair value by $1.6 million in 2023.
This indicates that changes in the market trend of the trade area affected certain of Noodles & Company's restaurant operating results and the underlying asset values of the restaurant lease. The company's decision to record these impairment charges suggests that the estimated fair value of these assets was lower than their carrying value, leading to a write-down of $1.6 million for the year 2023.
For a prospective franchisee, this information highlights the potential impact of market trends on restaurant operating results and asset values. It also demonstrates that Noodles & Company monitors these factors and adjusts its asset values accordingly. While the document does not provide the gross value of operating lease assets, it does show that these assets are subject to impairment based on market conditions.