Did Noodles & Company recognize any impairment charges on goodwill in 2024, 2023, or 2022?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
ercent chance that the fair value of its reporting unit is less than its carrying amount, then performing the two-step test is unnecessary. Based on the qualitative assessment performed, management did not believe that it is more likely than not that the Company's goodwill has been impaired.
Based on the Company's analysis, no impairment charges were recognized on goodwill in 2024, 2023 or 2022.
Intangibles, net
Intangibles, net consists primarily of reacquired franchise rights and trademarks. The Company amortizes the reacquired franchise rights over the remaining contractual terms of the reacquired franchise area development agreements at the time of acquisition, which ranged from approximately one year to eight years as of December 31, 2024. Trademark rights are considered indefinitelived intangible assets, the carrying value of which are analyzed for impairment at least annually (or more often, if necessary).
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment on a regular basis, in addition to whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the assets. Identifiable cash flows are measured at the lowest level for which they are largely independent of the cash flows of other groups of assets and liabilities, generally at the restaurant level.
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, no impairment charges were recognized on goodwill in 2024, 2023, or 2022. Goodwill, which represents the excess of the purchase price over the fair value of identifiable net assets acquired, is tested for impairment at least annually, specifically as of the first day of the company's fourth fiscal quarter.
For the years 2022 through 2024, Noodles & Company performed a qualitative impairment assessment to determine if it was more likely than not that the fair value of its reporting unit was less than its carrying amount. The "more-likely-than-not" threshold is defined as having a likelihood of more than 50 percent. If the qualitative assessment indicated less than a 50 percent chance of impairment, a two-step impairment test was deemed unnecessary.
Based on these qualitative assessments, Noodles & Company management determined that it was not more likely than not that the company's goodwill had been impaired during those years. As of December 31, 2024 and January 2, 2024, the goodwill balance remained at $7.2 million.