How often is Noodles & Company's goodwill tested for impairment, at a minimum?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
respectively. Interest incurred on funds used to construct company-owned restaurants is capitalized and amortized over the estimated useful life of the related assets. Capitalized interest totaled $0.4 million, $0.9 million and $0.6 million in 2024, 2023 and 2022, respectively.
Goodwill
Goodwill represents the excess of purchase price over the fair value of identifiable net assets acquired. Goodwill is not subject to amortization, but instead is tested for impairment at least annually (or more often, if necessary) as of the first day of the Company's fourth fiscal quarter.
Goodwill is evaluated at the level of the Company's single operating segment, which also represents the Company's only reporting unit. In 2024, 2023 and 2022, the Company performed a qualitative impairment assessment. Under this approach, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of its reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The more-likely-than-not threshold is defined as having a likelihood of more than 50 percent.
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, goodwill, which represents the excess of purchase price over the fair value of identifiable net assets acquired, is not subject to amortization. Instead, Noodles & Company tests it for impairment at least annually. This testing occurs as of the first day of the company's fourth fiscal quarter, but may occur more often if necessary.
For the years 2024, 2023 and 2022, Noodles & Company performed a qualitative impairment assessment. This assessment involves evaluating qualitative factors to determine if it is more likely than not (defined as having a likelihood of more than 50 percent) that the fair value of its reporting unit is less than its carrying amount. If the qualitative assessment indicates there is less than a 50 percent chance that the fair value is less than the carrying amount, a two-step goodwill impairment test is deemed unnecessary.
Based on their analysis, Noodles & Company did not recognize any impairment charges on goodwill in 2024, 2023, or 2022. This indicates that the company's goodwill was not considered to be impaired during those years, based on their assessment methods.