For Noodles & Company, do the restaurant impairments and closure costs include amounts related to restaurants previously impaired or closed?

According to the 2025 Noodles & Company Franchise Disclosure Document, restaurant impairments and closure costs include amounts related to restaurants that were previously impaired or closed. This means that when Noodles & Company calculates the costs associated with underperforming or closed restaurants, they include not only the costs directly related to the current impairment or closure, but also any ongoing expenses or losses from restaurants that had issues in the past.

For a potential Noodles & Company franchisee, this indicates that the financial performance of closed or impaired restaurants can have a lingering effect on the company's overall financial statements. These costs can include ongoing lease obligations, fees from real estate advisors, and final adjustments to liabilities as lease terminations occur. In 2024, these closure costs were offset by gains of $0.6 million, and in 2023, they were offset by gains of $0.2 million due to adjustments to liabilities when leases were terminated.

This approach to accounting for restaurant impairments and closure costs provides a more comprehensive view of the total financial impact of underperforming locations. It also highlights the importance of carefully evaluating the performance and potential risks associated with each Noodles & Company restaurant location. Franchisees should be aware that the costs associated with restaurant closures can extend beyond the initial closure period and may affect the company's overall profitability.