What were the restaurant impairments, closure costs, and asset disposals for Noodles & Company in 2024?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
he fair value measurement and unobservable (i.e., supported by little or no market activity).
6. Restaurant Impairments, Closure Costs and Asset Disposals
The following table presents restaurant impairments, closure costs and asset disposals for fiscal years 2024, 2023 and 2022 (in thousands):
| 2024 | 2023 | 2022 |
|---|
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, in 2024, the company faced several costs related to underperforming or closed restaurants. Restaurant impairments totaled $13,441,000, closure costs amounted to $2,337,000, and losses on the disposal of assets and other related items reached $4,490,000. The total restaurant impairments, closure costs, and asset disposals summed up to $20,268,000.
Restaurant impairments are based on the management's assessment of expected future cash flows from company-owned restaurants, considering recent performance and market factors. These impairments are determined by comparing the carrying value of restaurant assets to their estimated fair market value at resale. In 2024, Noodles & Company recorded fixed asset impairment on sixteen restaurants and wrote down lease related assets on seven restaurants. Additionally, the company wrote-off its lease related assets on two previously closed restaurants after determining abandonment of its lease on the retail space.
Closure costs include ongoing expenses for restaurants that closed in previous years and costs associated with closing thirteen restaurants in 2024. These costs can be offset by gains from adjustments to liabilities as lease terminations occur. In 2024, Noodles & Company recognized a gain of $0.6 million from these adjustments. Closure costs may also include fees for real estate advisors and brokers involved in lease terminations and charges from final adjustments to liabilities.
Losses on disposal of assets include asset disposals in the normal course of business and lease-related costs. However, in 2024, Noodles & Company recognized a gain of $0.5 million from the sale of six company-owned restaurants to a new franchisee. These figures provide insight into the financial challenges Noodles & Company faced in managing its restaurant portfolio and the costs associated with underperforming locations and closures.