What is the significance of ASC 280 in Noodles & Company's segment reporting?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
The Company has one reportable operating segment. The reportable operating segment is comprised of one operating segment, which has been aggregated to a single operating segment in consideration of the aggregation criteria set forth in ASC 280. The one reportable segment derives its revenue from companyowned restaurants and franchise owned restaurants. No guest accounts for 10% or more of the Company's revenues. The Company's CODM uses income (loss) from operations to evaluate performance and make key operating decisions, such as deciding the rate at which we invest resources into the segment.
The following table presents selected financial information with respect to our single reportable segment regularly reviewed by our CODM for 2024, 2023 and 2022 (in thousands):
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to the 2025 Noodles & Company FDD, ASC 280 plays a role in how the company reports its financial information. ASC 280, or Accounting Standards Codification 280, provides guidelines for segment reporting, which involves disclosing financial information about a company's operating segments.
For Noodles & Company, the document states that the company operates as one reportable operating segment. This single segment is determined by aggregating operating segments based on the criteria outlined in ASC 280. The revenue for this segment is derived from both company-owned and franchise-owned restaurants. The Chief Operating Decision Maker (CODM), which includes the CEO, CFO, and COO, uses the income (loss) from operations of this segment to assess performance and make key operational decisions, such as resource allocation.
In practical terms, this means that Noodles & Company does not break down its financial performance into multiple segments (e.g., by geographic region or type of restaurant). Instead, it presents a consolidated view of its financial results. For a potential franchisee, this indicates that the financial performance data available will be at a company-wide level, rather than specific to certain types of locations or markets. The FDD includes selected financial information for this single reportable segment for 2024, 2023, and 2022, which is regularly reviewed by the CODM.