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Noodles & Company

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Noodles & Company
Company typePublic
Nasdaq: NDLS (Class A)
Russell 2000 Index component
IndustryFast Casual
Founded1995; 29 years ago (1995) in Cherry Creek, Denver, Colorado
FounderAaron Kennedy
HeadquartersBroomfield, Colorado, U.S.
Number of locations
448[1]
Area served
United States
Key people
Dave Boennighausen (CEO)[2]
ProductsPasta
Salads
Soups
Appetizers
& Other food products
RevenueIncrease US$475.16 million (FY Ended 12/28/2021)[1]
Increase US$5.82 million (FY Ended 12/28/2021)[1]
Increase US$3.66 million (FY Ended 12/28/2021)[1]
Total assetsDecrease US$341.46 million (FY Ended 12/28/2021)[1]
Total equityIncrease US$37.63 million (FY Ended 12/28/2021)[1]
Number of employees
~8,000 (As of Dec. 28, 2021)[1]
Websitewww.noodles.com
Footnotes / references
[3]

Noodles & Company is an American fast-casual restaurant that offers international and American noodle dishes in addition to soups and salads. Noodles & Company was founded in 1995 by Aaron Kennedy and is headquartered in Broomfield, Colorado. The company went public in 2013 and recorded a $457 million revenue in 2017.[4] In mid-2022, there were 458 Noodles & Company locations across 31 states.[5]

History

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Origins

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The idea for Noodles & Company was conceived by former Pepsi marketing executive Aaron Kennedy, after eating at Mamie's Asian Noodle Shop[6] in Greenwich Village, New York.[7] He felt there were not enough restaurants that served noodle dishes, which are a staple for many international foods.[7][8] Kennedy started developing recipes out of his mother-in-law's kitchen with the future COO, Joe Serafin, and head chef, Ross Kamens, in 1994.[9]

Kennedy raised $72,000 ($150,065 in 2023 dollars) in personal funds and $200,000 ($411,136 in 2023 dollars) in investments from 24 friends and family members.[10][11] The first Noodles & Company was opened in October 1995, in the Cherry Creek neighborhood of Denver, Colorado.[6][11][12][13] Kennedy was joined by partner and real estate developer Tom Weigand, whom he had met at Augustana College.[11][14] They opened a second location in Madison, Wisconsin, the following March.[6][11][15]

Early history

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In the first three months, Noodles & Company lost $42,000 ($81,594 in 2023 dollars),[8] and almost went out of business in 1996 after a reporter with the Wisconsin State Journal published a negative review.[16] The reviewer said Noodles & Company was "a killer idea"[17] but "criticized nearly every dish he'd tried".[18] The Denver Post[19] and other newspapers[20] had published similar reviews. In response, Kennedy started a "Redefine Noodles & Company" campaign "to redefine and refine nearly every aspect of the operation".[16][18]

In mid-1996, the management team went to Chicago to observe other noodle restaurants[18][7] and, the night of their return, the basement flooded at the Madison location.[21] The next day, Kennedy made a list of 15 areas for improvement.[16] Rocky Mountain News said: "the team completely revamped the Noodles concept, overhauling the menu, the prices, the decor and more. It worked."[8] The restaurant implemented a warmer color scheme. Steam tables to keep food warm were replaced with saute lines to cook each dish as it is ordered.[7][18] Two new managers were hired and an executive chef re-worked the menu.[18] According to Inc. Magazine, within sixty days "the food had improved dramatically".[16]

Growth

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View of the saute line from the customer counter at a Noodles & Company restaurant

From 1996 to 2000, Noodles & Company's revenues grew from $330,000 ($641,095 in 2023 dollars) to $13 million ($23 million in 2023 dollars).[22] Local food critics in many cities began naming Noodles & Company as the best fast-food restaurant in the city, and it was frequently listed as a "company to watch".[6] It won a Hot Concept! award from Nation's Restaurant News.[23] $1 million ($1.87 million in 2023 dollars) in stock was sold in 1998, which was followed by a $2.5 million ($4.67 million in 2023 dollars) round of funding and a $5 million round in 2000.[8] ($8.85 million in 2023 dollars)

The restaurant had 37 locations in 2002,[9] 65 in 2003, and 142 by 2007. The company started franchising in 2003 and by 2007, 22 of its stores were franchises.[9][24][25] The restaurants were redesigned in 2004 with lighter colors, new packaging, a greater emphasis on carryout orders and a floorplan that emphasized an open kitchen, where the saute line was visible to customers.[26]

According to Rocky Mountain News, the company was growing "so fast that it has had to move every two years".[27] In 2006, its headquarters were moved from Boulder to Broomfield, Colorado.[28][29] The company's founder, Aaron Kennedy, stepped down from his position as CEO that same year and was replaced by Kevin Reddy.[30] The number of Noodles & Company locations grew threefold from the beginning of the financial crisis of 2007–08 to 2013, reaching 339 locations.[31]

Recent history

[edit]
Location in Wauwatosa, Wisconsin

In 2010, a majority interest in Noodles & Company was acquired by an investment group led by Catterton Partners.[28][32][33] In January 2013, bankers told the Financial Times that Noodles & Company was scouting for underwriters for an initial public offering (IPO).[34][35] Two months later, the intent for a public offering was confirmed with a filing with the U.S. Securities and Exchange Commission for $75 million in stock. Around this time, the company had reached 339 locations, 51 of which were franchises, and $300.4 million in revenues.[36] Within a day following Noodles & Company's IPO on June 27, the stock price doubled. Fast Company and The Daily Beast called it "the hottest IPO of the year" and compared it to Chipotle's IPO.[37][38]

On November 16, 2015, Noodles & Company announced that it had pulled out of Central Texas, closing all five of its locations in the Austin area. Restaurants in a handful of other cities had closed or were planned to close within the coming weeks, including locations in Lubbock and the Washington, D.C., area, according to published reports.[39] Ultimately, 16 locations were closed by the end of the year.[40]

On July 25, 2016, in Alexandria, Virginia, two Noodles & Company employees refused to serve a uniformed police officer. The officer left the restaurant and reported the incident, which gained regional news coverage. The company issued an apology and terminated the employees involved in the incident.[41]

In 2017, the company planned to close 55 underperforming restaurants, but also planned to open 14 to 17 new locations.[42] It also launched a pilot test in the Colorado Springs and Kansas City markets.[43] The test included a new name, Noodles World Kitchen,[44] as well as new menu items, customizations, rapid pick-up service, and a rewards program.[45]

[edit]
A Wisconsin macaroni and cheese from Noodles & Company

Noodles & Company offers international and American noodle dishes, as well as soups, salads, and pasta.[46] It also sells baguettes and desserts like Rice Krispies Treats.[10][23]

Originally, most pasta entrees came vegetarian with optional protein toppings such as tofu, chicken, beef or shrimp.[6] In 2017, menu items started being marketed and featured with specific proteins, increasing the menu prices. For example, the Buffalo Chicken Mac can be ordered with another protein for nearly the same cost (depending on the protein) or no protein for a lesser cost.

Customers order at the counter and are served at their table,[11] usually within five to seven minutes.[47] The average check is approximately $8 per person.[48] The restaurants use soft lighting, furniture made from recycled bamboo and have bench seating and community tables.[49] Orders can be made online for dine-in or to-go,[46] with the majority of locations offering curbside pickup[50] and select locations offering drive-up lanes for pickup.[51]

Seasonal items were first introduced to supplement the menu in 2002.[9] Two years later, noodle-less entrees were added in response to the trend for low-carb diets.[52][53] The following year it introduced a whole-grain Tuscan fettuccine.[54][55] Naturally raised pork was added as a meat option in 2012.[56] Three seasonal items and a gluten-free fusilli were added in April 2013.[57][58]

In 2015, Noodles & Company debuted customizable kids' meals.[59]

Sometime between July 2016[60] and October 2016,[61] sandwiches were quietly removed from the Noodles website, with the last web snapshot that recorded the inclusion of sandwiches on the menu having occurred at the end of that July.[60]

Although they offer gluten-free and vegan options, they warn that cross-contamination may occur.[62]

Advertising

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From 1997 to 2002, Noodles & Company sponsored outdoor and print ads. By 2002 it had a $1.3 million advertising budget and began airing ads on major television networks.[63] Afterwards, in the early 2000s, the company reduced its advertising resources, before a rebranding effort that started in 2008.[64]

The slogan "Your World Kitchen" was introduced in 2013. The largest component of Noodles & Company's advertising is in outdoor ads like billboards, but it also invests in radio, digital media and news sites. The billboards emphasize the global cuisine. One points to a parking lot and says "Recipes imported from more countries than these cars."[65][66]

Operations and franchises

[edit]
Location in Sheboygan, Wisconsin

Many Noodles & Company restaurants are owned and operated by Noodles & Company Incorporated, but some are operated in a franchise model. Franchise locations are operated by an independent franchisee that is trained by Noodles & Company and uses the same menu, pricing and branding as corporate-owned stores.[24] As of 2010, the average Noodles & Company store generated more than $1 million in annual revenue, with a profit of 21 percent.[67] Takeout orders account for approximately 25 percent of revenues.[11] According to Inc. Magazine, Noodles & Company is more selective in franchise partners than other franchise-based restaurants, and has a higher ratio of corporate-owned stores than most franchising restaurants.[68]

References

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  1. ^ a b c d e f g "Noodles & Company 2021 Annual Report Results". February 24, 2022. Retrieved November 2, 2022.
  2. ^ "Company Overview of Noodles & Company". Bloomberg. Retrieved March 24, 2018.
  3. ^ "Noodles & Company 2021 Annual Report Form (10-K)". U.S. Securities and Exchange Commission. February 24, 2022. Retrieved November 2, 2022.
  4. ^ "Noodles & Company Company Profile | D&B Hoovers". www.hoovers.com. Retrieved December 3, 2018.
  5. ^ "All Noodles & Company Locations | Noodles, Pasta, Salads & More". locations.noodles.com. Retrieved August 1, 2022.
  6. ^ a b c d e Thorn, Bret (2005). "Noodles & Company". Nation's Restaurant News.
  7. ^ a b c d Sull, Donald (October 6, 2009). The Upside of Turbulence. HarperCollins. p. 57. ISBN 978-0-06-193976-1. Retrieved June 13, 2013.
  8. ^ a b c d Graham, Sandy (September 24, 2000). "Pasta Entrepreneur Uses his Noodle". Rocky Mountain News. p. 3G. Alternate Link via NewsBank.
  9. ^ a b c d Rogers, Monica (January 1, 2002). "The zen of noodles: Noodles & Company menu master Ross Kamens never stops exploring new ways to prepare pasta". Chain Leader. Vol. 7, no. 1.
  10. ^ a b Sharos, David (March 15, 2001). "Eatery Owner Adds Naperville to Plate". Chicago Tribune. Retrieved June 14, 2013.
  11. ^ a b c d e f LaVecchia, Gina (2000). "Going Bowling". Restaurant Hospitality. Vol. 62, no. 7. p. 84.
  12. ^ "Denver institution Hummel's Deli closes after 52 years". Denver Post. July 15, 1995. Alternate Link via NewsBank.
  13. ^ Conklin, Michele (October 5, 1995). "Restaurateur Uses His Noodle for Cherry Creek North Eatery Entrepreneur Hopes to Start Chain With Low Prices, Casual Dining, Eclectic Menu". Rocky Mountain News. p. 65A. Alternate Link via NewsBank.
  14. ^ Arney, Steve (March 19, 2005). "Oodles of Noodles; Company plans B-N restaurants". The Pantagraph. Alternate Link via NewsBank.
  15. ^ Gribble, Roger A. (December 15, 1995). "State Street Deli to Go". Wisconsin State Journal. p. 8B. Alternate Link via NewsBank.
  16. ^ a b c d Matthews, Carole (April 2, 2003). "You can't always go it alone". Inc. Magazine. Retrieved June 14, 2013.
  17. ^ Kovalic, John (April 14, 1996). "Noodles & Company a Great Idea, but Food Comes up a bit limp; State Street Spot Doesn't Reach Potential". Wisconsin State Journal. pp. 7F. Alternate Link via NewsBank.
  18. ^ a b c d e O'Sullivan, Kate (September 1, 2011). "Using Your Noodle". Inc. Magazine. Retrieved June 14, 2013.
  19. ^ Kessler, John (November 10, 1995). "Menu has every kind of noodles (except hot)". The Denver Post. p. 2D. Alternate Link via NewsBank.
  20. ^ Kalk, Samara (March 30, 1996). "Using The Noodles: Why Didn't I Think Of That First?". Madison Capital Times. p. 4E. Alternate Link via NewsBank.
  21. ^ Gant, Tina (June 22, 2007). International Directory of Company Histories. Gale. ISBN 9781558625907. Retrieved June 14, 2013.
  22. ^ Brand, Rachel (October 19, 2001). "Former Wild Oats Exec Joins Noodles & Company". Rocky Mountain News. pp. 2B. Alternate Link via NewsBank.
  23. ^ a b Pleasure, M. J. (April 17, 2003). "Noodles & Company speaks a universal language: pasta". The Gazette (Maryland). Archived from the original on March 4, 2016. Retrieved June 15, 2013.
  24. ^ a b Hitt, Michael A. & Ireland, R. Duane (2008). Competing For Advantage. Cengage Learning. pp. 218–. ISBN 978-0-324-31666-7. Retrieved June 13, 2013.
  25. ^ Berta, Dina (June 2, 2003). "Noodles & Company plots expansion with aggressive franchising". Nation's Restaurant News. Vol. 37, no. 22. p. 8. ISSN 0028-0518. Retrieved June 13, 2013 – via EBSCO.
  26. ^ Lockyer, Sarah E. (November 29, 2004). "Carving out a brand-new niche". Nation's Restaurant News. Vol. 38, no. 48. pp. 4–38. ISSN 0028-0518. Retrieved June 14, 2013 – via EBSCO.
  27. ^ Rebchook, John (April 5, 2002). "Noodles & Company Expands in Boulder". Rocky Mountain News. p. 5B. Alternate Link via NewsBank.
  28. ^ a b Wallace, Alicia (December 28, 2010). "Equity firm takes majority stake of Broomfield's Noodles & Co". Colorado Daily. Archived from the original on August 26, 2016. Retrieved June 14, 2013.
  29. ^ Shanley, Will (September 5, 2006). "Boulder weighs incentives". The Denver Post. pp. C-01.
  30. ^ Berta, Dina (May 22, 2006). "Kennedy: Noodles' undercover chief investigates employee experience". Nation's Restaurant News. Vol. 40, no. 21. p. 32. ISSN 0028-0518. Retrieved June 14, 2013 – via EBSCO.
  31. ^ World News Now (Broadcast Television). Chicago, Il: WLS-CHI (ABC). June 12, 2013.
  32. ^ "Noodles & Company purchased". Denver Business Journal. December 28, 2010. Retrieved June 15, 2013.
  33. ^ "Broomfield-based Noodles & Company sold to investment firm". Denver Post. December 28, 2010. Retrieved June 14, 2013.
  34. ^ Jennings, Lisa (January 17, 2013). "Noodles & Company shifts marketing message". Nation's Restaurant News. Retrieved June 15, 2013.
  35. ^ Ballaban, Michael & Biswas, Soma (January 9, 2013). "Noodles & Company interviewing advisors for initial public offering". Financial Times. Archived from the original on December 11, 2022. Retrieved June 14, 2013.
  36. ^ Migoya, David (May 23, 2013). "Noodles & Co. Files intent for IPO". The Denver Post. Retrieved June 14, 2013.
  37. ^ Gross, Daniel (July 2, 2013). "How a Pasta Chain Called Noodles & Co. Punked Wall Street". The Daily Beast. Retrieved July 3, 2013.
  38. ^ Kamenetz, Anya (July 2, 2013). "The Recipe for Noodles & Company's Secret Sauce?". Fast Company. Retrieved July 3, 2013.
  39. ^ Dinges, Gary (November 16, 2015). "Restaurant chain pulls out of Austin, closing 5 locations". Austin American-Statesman. Retrieved November 16, 2015.
  40. ^ Wallace, Alicia (November 5, 2015). "Noodles & Co. to shutter 16 restaurants after missing earnings target". Denver Post.
  41. ^ "Noodles & Company employees fired for refusing service to uniformed Virginia officer".
  42. ^ "Noodles & Company offers update on restaurant closures". nrn.com. March 2, 2017. Retrieved April 28, 2017.
  43. ^ Vaupel, Andrew (May 17, 2017). "Fast-casual restaurant with KC ties unveils pilot test". Kansas City Business Journal. Retrieved September 6, 2021.
  44. ^ "Noodles & Co. considers name change". Nation's Restaurant News. June 15, 2017. Retrieved September 6, 2021.
  45. ^ "Only in Colorado Springs: Noodles & Company tests new name and food". KKTV. June 1, 2017. Retrieved September 6, 2021.
  46. ^ a b Brandt, Akasha (January 23, 2012). "Noodles & Company opens in Market Square, serves variety of pasta dishes". The Globe (Point Park University student paper). Archived from the original on September 27, 2013. Retrieved June 15, 2013.
  47. ^ Korbelik, Jeff (June 3, 2005). "Using your noodle". Lincoln Journal Star. p. 20. Alternate Link via NewsBank.
  48. ^ Much, Marilyn (September 20, 2013). "Noodles & Co. Restaurant Future Looks Tasty After IPO". Investor's Business Daily. Retrieved September 23, 2013.
  49. ^ "Noodles & Company set to open Tuesday". The State Journal-Register. July 13, 2008. p. 13. Alternate Link via NewsBank.
  50. ^ "Noodles & Company sees sales improve after adding curbside pickup to 75% of restaurants". Nation's Restaurant News. April 15, 2020. Retrieved September 6, 2021.
  51. ^ "New unit growth at Noodles & Company to focus on small-format stores with drive-up lanes for mobile orders". Nation's Restaurant News. August 6, 2020. Retrieved September 6, 2021.
  52. ^ Iggers, Jeremy (November 11, 2004). "Noodling around". Star Tribune. pp. 10T. Retrieved June 13, 2013. Alternate Link via NewsBank.
  53. ^ Warchol, Glen (August 31, 2004). "Oodles more 'Noodles' set for Utahns' Palates". The Salt Lake Tribune. pp. E1.
  54. ^ Phillips, Valerie (February 25, 2005). "Stand by your bran". Deseret News. Archived from the original on September 27, 2013. Retrieved June 14, 2013.
  55. ^ "Noodles & Company offers whole-grain dish". Denver Business Journal. February 17, 2005. Retrieved June 15, 2013.
  56. ^ Coomes, Steve (April 29, 2013). "Noodles & Company: Fast-casual chain finds success with Slow Braised, Naturally Raised Pork". Nation's Restaurant News. Vol. 47, no. 8. p. 48. ISSN 0028-0518. Retrieved June 15, 2013 – via EBSCO.
  57. ^ Thorn, Bret (April 10, 2013). "Menu Tracker: New items from KFC, Little Caesars". Nation's Restaurant News.
  58. ^ Strom, Stephanie (December 25, 2012). "In Hopes of Healthier Chickens, Farms Turn to Oregano". The New York Times. Retrieved June 14, 2013.
  59. ^ Jennings, Lisa (September 30, 2015). "Noodles & Company debuts customizable kids' meals". Nation's Restaurant News. Retrieved March 13, 2016.
  60. ^ a b "Our Menu". Noodles & Company. Archived from the original on July 29, 2016.
  61. ^ "Our Menu". Noodles & Company. Archived from the original on October 23, 2016.
  62. ^ "Nutrition Guide and Allergen Guide". Noodles & Company. Retrieved October 21, 2014.
  63. ^ "Noodles & Company takes to airwaves, rolls 1st TV spots". Nation's Restaurant News. Vol. 36, no. 44. November 4, 2002. p. 14. ISSN 0028-0518. Retrieved June 13, 2013 – via EBSCO.
  64. ^ "Noodles and Company Taps Carmichael Lynn". Adweek. November 10, 2008. Retrieved June 21, 2013.
  65. ^ "Noodles & Co. Gets Creative with Campaign". QSR. April 13, 2013. Retrieved June 15, 2013.
  66. ^ Lukovitz, Kariene (April 11, 2013). "Noodles & Company Launches Multichannel Push". MediaPost Communications. Retrieved June 15, 2013.
  67. ^ "FDD Talk: Average Sales, Expenses, and Operating Profits of Noodles & Company in 2010". Franchise Chatter. December 31, 2011.
  68. ^ Vanden Bos, Peter (May 24, 2010). "How to Choose the Right Franchise Location". Inc. Magazine. Retrieved June 14, 2013.
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[[Category:2013 initial public offerings]

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