Section IV – Background Information on the Noodles & Company Franchise
Continues Strong 2021 Performance
1. Noodles & Company released its Q3 results in late October 2021. The company’s total revenue in the third quarter increased 18. 1 percent to $125. 1 million, up from $106 million in Q3 of 2020. The business kept up its strong 2021 performance with positive margins in the majority of categories, including comp sales, which rose by 16 percent. 3 percent system-wide, made up of a 15. Restaurants owned by the company saw a 3 percent increase and franchise restaurants saw a 21 percent increase. The company’s average unit volume (AUV) increased and reached a record-high of $1. 38 million, a 16 percent increase from the third quarter of 2020 and a 15 9 percent increase over Q3 2019.
2. In addition to strong sales results, our restaurant-level margin increased 270 basis points from the previous year to 18 in the third quarter, according to CEO Dave Boennighausen. 1 percent, despite the impact of the current inflationary environment. ”.
3. Boennighausen credited several factors. He claimed that the success of recently opened units, particularly those that made their debut between 2019 and 2021, could be responsible for both AUV and the company’s margin expansion. Those stores continue to perform above company averages. Additionally, according to Boennighausen, the fast casual’s ongoing implementation of a three-tiered strategic plan has yielded measurable results. The three tiers are as follows: furthering the brand’s activation through digital assets, differentiating the company’s concept to appeal to a wide range of lifestyles, and accelerating unit growth to take advantage of an operating model that the concept believes is best suited for a post-COVID world.
4. With membership nearing 4 million, Noodles & Company’s rewards program continues to be beneficial for the business. The program, according to the CEO, is crucial to attracting new clients and enables Noodles & Company to create more individualized, pertinent communications.
5. “We have made significant progress,” continued Boennighausen, “with our digital capabilities and their impact on attracting new customers, new usage scenarios, and increased frequency among a variety of consumers. Even though in-restaurant ordering returned to 70% of pre-COVID levels in the third quarter, digital still accounted for 52% of our sales. ”.
6. Order-ahead drive-thru windows are a feature of some restaurants that opened between 2019 and 2021, and Boennighausen attributes this new feature to helping increase sales. He stated that according to estimates from the business, on average, the new feature boosts sales at new restaurants by 10–20 percent. “We continue to expect order-ahead, drive-thru windows to be included in at least 70% of new restaurants as they improve convenience for our guests and are simple to execute for our operations teams,” he said.
7. Noodles & Company hasn’t completely avoided problems like supply chain shortages that have beset others in the industry, despite the fact that new units are surging. CFO Karl Lukach said several openings were pushed back. According to Lukach, over the past few months there have been delays in construction, landlord building delivery, and equipment availability. Due to this, we have moved two franchise openings and three company openings that were originally scheduled for 2021 into early 2022. ”.
8. Instead of the previously anticipated 10-15 new restaurants, the company now anticipated seven to nine new locations for 2021. The number of stores opening in 2021 changed, but it had little impact on projections for overall growth. According to Lukach, the company plans to eventually open at least 1,500 units nationwide, and the larger pipeline is still strong.
9. The CFO also gave an update on the introduction of new steamer equipment. By the end of the year, he predicted that the company will have completed up to 90% of the steamer equipment that has been ordered. Improved cook times, decreased labor hours, and higher food taste scores continue to be encouraging, according to Lukach.
10. Operating expenses for Noodles & Company were 280 basis points higher than in 2019. Lukach said this can be attributed to third-party delivery fees. “Delivery fees were 5. 3 percent of sales, down from 5 percent, in the third quarter. 5 percent in the third quarter of last year. Going forward, we anticipate that third-party delivery will continue to be a key component of the business. And as a result, we anticipate our operating cost percentage to be at levels comparable to the third quarter in the fourth quarter,” he said.
11. Menu prices have been rising consistently across the board for the industry as inflation and supply shortages continue to have an impact on the costs of goods. The core menu at Noodles & Company will see a 2 percent price increase in the fourth quarter of 2018. This increase will coincide with the reimposition of price changes made in the fourth quarter of last year, and we anticipate full fourth-quarter pricing to be about 7 5 percent,” Lukach said.
12. For Q3, cost of goods sold was 25. 1 percent of sales, which is a better result than what was anticipated in Q2 2021. This represents an increase of 30 basis points from 2020 and a 20 basis point improvement over Q3 2019. That can be attributed to three things, Lukach said. In order to temporarily offset the current inflationary environment, he added, “shorter-term inventory was temporarily secured at more favorable rates than the spot market, driving efficiencies in our discounts, and the 3 percent pricing we took on our core menu during the third quarter.”
announces the signing of a 55-restaurant franchise agreement with Warner Foods in California.
13. Noodles & Company announced a partnership with Warner Foods as its new sole franchise partner for the state of California in the middle of January 2022. Warner Foods, which will carry out its 12-year growth plan commitment as NorCal Noodles, LLC (NorCal Noodles) under this agreement, will build 40 new Noodles & Company locations across the state. Additionally, as part of the agreement, NorCal Noodles will re-franchise all 15 of the current company-owned Noodles & Company locations in California. The deal was anticipated to close on January 12, 2022, a Wednesday.
14. “We are thrilled to announce our partnership with Warner Foods to further expand our brand into the California market,” said Dave Boennighausen, CEO of Noodles & Company. Importantly, this is also the second new franchise agreement that has been publicly announced in the recent months, demonstrating progress toward our goal of significantly increasing the number of franchise locations as part of our overall growth strategy. Warner Foods is the ideal candidate to expand the reach of the Noodles & Company brand throughout California because of their demonstrated track record of excellent operations and customer- and people-centric culture. The brand is well-positioned as an appealing growth vehicle for franchise investment thanks to its economic model, on-trend culinary innovation, and capacity to satisfy the needs of today’s consumers through our off-premise and digital strengths. ”.
15. We are thrilled to add Noodles to our portfolio of brands, Eddie Nieves, partner and operator at Warner Foods, said. One of the most powerful brands in the fast-casual sector is Noodles. Over the past few years, we’ve seen Noodles establish itself as a leader in the industry by continually innovating its menu, its culture, and its brand. The chance to work with them and expand Noodles in California, where we already have success with our other brands, excites us. ”.
Company History
16. Aaron Kennedy established Noodles & Company in Denver, Colorado, in 1995. While eating at Mamie’s Asian Noodle Shop in New York, Kennedy, a marketing executive for Pepsi at the time, had the idea for Noodles & Company. He observed that the quick-service restaurant (QSR) industry lacked a dedicated noodle restaurant. Kennedy started creating recipes for the concept a year before the first Noodles & Company restaurant opened. Kennedy worked with future COO Joe Serafin and head chef Ross Kamens on the project.
17. Unfortunately, Noodles & Company really struggled in the beginning. Noodles & Company lost $42,000 in the first three months (equivalent to $72,567 in 2021 dollars). The Wisconsin State Journal’s unfavorable review nearly caused the restaurant to go out of business. Kennedy made the decision to overhaul everything, including the menu and operational procedures, in response to additional extremely negative reviews.
18. Midway through 1996, Kennedy and his team regrouped and made a number of changes, including a complete overhaul of the menu, setting, pricing, and method of cooking the noodles. All the changes worked and Noodles & Company recovered. Kennedy began opening additional locations and franchising started in 2003. In 2010, a group of investors led by Catterton Partners purchased the majority of Noodles & Company. Noodles & Company restaurants can now be found in 29 states and Washington, D.C. C. Although Noodles & Company has recently made investments in additional franchise expansion, the majority of these locations are company-owned.
Entrepreneur’s Franchise 500
19. The 2022 Franchise 500 list from Entrepreneur did not include Noodles & Company.
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Noodles & Company has franchised locations in 15 states, according to 2020 FDD analysis. IL IN KY MI MN MO MT ND NE SD TN WI CT FL IA IL IN KY
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Last Reviewed: 2020
Quick Pickup, Direct Delivery & Online Ordering
An outstanding off-premises dining experience makes Noodles & Company stand out. Not only can customers place their own orders, but Noodles delivered from our restaurants taste just as good.
With Noodles & Company’s cutting-edge technology, you can access training modules online, check inventory on an iPad, decrease labor waste with scheduling systems, and more.
FAQ
Are Noodles and Company franchises?
Many of the features that set Noodles & Company apart from other restaurant franchises will be available to you as a franchise owner. We’ll provide you with the one-of-a-kind resources you need to expand your company, from our adaptable footprints to our technology and innovation. Continue reading to find out more about….
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How much is franchise in Singapore?
Depending on the franchise you select, the initial investment costs in Singapore typically range from S$30,000 to S$500,000. In Singapore, opening a franchise is a fairly simple process that takes about six months to complete.
Is Noodles and Company owned by Mcdonalds?
Noodles & Co has both company operated stores and franchisees. 239 company-owned Noodles & Co. locations generated $253 million in revenue last year, and $2 45 franchised stores generated $6 million in sales, bringing the total revenue from 284 restaurants to $256 million. What’s the Deal With Noodles & Company?Company5 year CAGRMcDonald’s4. 62%.
