How does the Noodles & Company Noodles Rewards program primarily function?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
hat were included in the contract liability balance at the beginning of the year. The Company expects to recognize approximately $0.1 million each fiscal year through fiscal 2029 and approximately $0.6 million thereafter related to performance obligations that are unsatisfied as of December 31, 2024.
Loyalty Program
The Company operates the Noodles Rewards program, which is primarily a spend-based loyalty program. With each purchase, Noodles Rewards members earn loyalty points that can be redeemed for rewards, including free products. Using an estimate of the value of reward redemptions, we defer revenue associated with points earned, net of estimated points that will not be redeemed. Points generally expire after si
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to the 2025 Noodles & Company Franchise Disclosure Document, the Noodles Rewards program is primarily a spend-based loyalty program. Members earn loyalty points with each purchase, which can then be redeemed for rewards such as free products.
Noodles & Company estimates the value of reward redemptions and defers revenue associated with the points earned. This means they don't recognize the revenue until the points are actually redeemed, accounting for points that are not expected to be redeemed. The deferred revenue related to the rewards program was $1.0 million as of December 31, 2024, and $0.9 million as of January 2, 2024; these amounts were included in accrued expenses and other current liabilities on the Consolidated Balance Sheets.
Points earned through the Noodles Rewards program generally expire after six months. This encourages customers to make repeat purchases within that timeframe to utilize their accumulated points. This type of loyalty program is common in the restaurant industry as a way to incentivize customer loyalty and drive sales.