What were Noodles & Company's total deferred tax assets in 2023 (in thousands)?
Noodles_Company Franchise · 2025 FDDAnswer from 2025 FDD Document
| | Valuation allowance | | (60,157) | (50,673) | | Net deferred tax liabilities | $ | (276) $ | (255) |
Deferred income taxes arise because of the differences in the book and tax bases of certain assets and liabilities. Deferred income tax liabilities and assets consist of the following (in thousands):
| 2024 | 2023 | |
|---|---|---|
| Deferred tax assets (liabilities): | ||
| Loss carry forwards | $ 47,555 | $ 45,547 |
| Deferred franchise revenue | 1,655 | 1,968 |
| Property, equipment and intangible assets | (14,479) | (20,473) |
| Stock-based compensation | 1,197 | 1,872 |
| Tax credit carry forwards | 10,143 | 8,744 |
| Interest expense | 3,609 | 1,935 |
| Inventory smallwares | (1,754) | (1,772) |
| Other a |
Source: Item 22 — CONTRACTS (FDD pages 98–99)
What This Means (2025 FDD)
According to Noodles & Company's 2025 Franchise Disclosure Document, the company's total deferred tax assets in 2023 were $50,418,000 (in thousands). This figure represents the net amount after accounting for a valuation allowance of $50,673,000. The deferred tax assets include items such as loss carry forwards, deferred franchise revenue, stock-based compensation, tax credit carry forwards, interest expense, other accrued expenses, operating lease liabilities, and other assets, offset by items like property, equipment and intangible assets, inventory smallwares, and operating lease assets.
A deferred tax asset arises when a company has overpaid taxes or has tax deductions or credits that can be used to reduce future taxable income. These assets are recorded on the balance sheet and represent a future benefit to the company. However, the company must assess the likelihood that these assets will actually be realized in the future. If it is more likely than not that some or all of the deferred tax assets will not be realized, a valuation allowance is established to reduce the carrying value of the assets. In the case of Noodles & Company, a valuation allowance was deemed necessary due to uncertainty regarding the realizability of future tax benefits.
For a prospective franchisee, understanding these deferred tax assets and the valuation allowance is important for assessing the overall financial health and tax position of Noodles & Company. While deferred tax assets can be a valuable resource for reducing future tax liabilities, the valuation allowance indicates that there is some risk that these benefits may not be fully realized. This could impact the company's future profitability and cash flow, which could in turn affect the franchisee's investment and returns.