Are pre-opening costs for a Noodles & Company restaurant, such as rent and wages, expensed as incurred?

According to the 2025 Noodles & Company Franchise Disclosure Document, pre-opening costs are expensed as incurred. These costs include rent, wages, benefits, travel for training and opening teams, food, beverage, and other restaurant operating costs that occur before the restaurant opens for business.

This accounting practice means that Noodles & Company does not capitalize these initial expenses as assets on the balance sheet. Instead, they are recognized as expenses on the income statement in the period they are incurred. For a franchisee, this implies that these pre-opening expenses will impact the initial profitability of the business, as they are immediately deducted from revenue.

This approach is a standard accounting practice in the franchise industry. Expensing pre-opening costs provides a transparent view of the initial investment and operational expenses, which can help potential Noodles & Company franchisees better understand the financial dynamics of starting a franchise.