NOODLES & Co
For the period ended Jul 1, 2025. Filed Aug 14, 2025.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jul 1, 2025 · Filed Aug 14, 2025
NDLS$14.05-6.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-04-01; filed 2025-05-08.
0001275158-25-000044
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-07-01; filed 2025-08-14.
0001275158-25-000090
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 102 previous paragraphs and 126 current paragraphs.
73 unchanged; 24 reworded; 26 added; 5 removed; 0 previous and 3 current paragraphs rearranged.
Tables are not compared: 6 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (26)
Current report
•pricing and perceived value;
Current report
(1) Represents six company-owned restaurants sold to a franchisee in 2024.
Current report
Total revenue decreased $0.9 million in the second quarter of 2025, or 0.7%, to $126.4 million, compared to $127.4 million in the second quarter of 2024. This decrease was primarily due to a reduction of $3.6 million in sales from permanent restaurant closures, mostly offset by an increase of $1.6 million in comparable sales and a $1.4 million increase in new restaurant revenue. System-wide comparable restaurant sales increased 1.5% in the second quarter of 2025 compared to the same period of 2024, comprised of a 1.5% increase at company-owned restaurants and a 1.6% increase at franchise-owned restaurants.
Current report
Cost of sales increased by $2.0 million, or 6.5%, in the second quarter of 2025 compared to the same period of 2024. As a percentage of restaurant revenue, cost of sales increased to 26.5% in the second quarter of 2025 compared to 24.7% in second quarter of 2024, primarily due to a 2.2% impact from a combination of menu investments, mix shifts, and inflation, which were partially offset by a 0.4% menu price benefit.
Current report
Labor costs increased by $0.3 million, or 0.8%, in the second quarter of 2025 compared to the same period of 2024. As a percentage of restaurant revenue, labor costs increased to 31.7% in the second quarter of 2025 compared to 31.2% in the second quarter of 2024 primarily due to 0.7% of wage inflation and 0.5% increase in labor hours related to the new menu rollout, partially offset by a 0.2% benefit from sales leverage and a 0.5% benefit from lower incentive pay and benefits.
Current report
Other restaurant operating costs increased by $0.5 million, or 2.0%, in the second quarter of 2025 compared to the second quarter of 2024. As a percentage of restaurant revenue, other restaurant operating costs increased to 19.7% in the second quarter of 2025 compared to 19.2% in the second quarter of 2024 primarily due to a 0.4% impact from higher delivery fees driven by higher delivery sales and 0.4% from the new menu rollout which includes increased marketing spend, partially offset by 0.3% of sales leverage.
Current report
Restaurant impairments, closure costs and asset disposals increased $1.6 million to $13.7 million in the second quarter of 2025 and the second quarter of 2024. We recorded fixed asset impairment on 15 restaurants and wrote down lease related assets onten restaurants during the second quarter of 2025. We recorded fixed asset impairment on 12 restaurants and wrote down lease related assets on three restaurants during the second quarter of 2024.
Current report
Two Quarters Ended July 1, 2025 Compared to Two Quarters Ended July 2, 2024
Current report
*Not meaningful.
Current report
Revenue
Current report
Total revenue increased by $1.5 million, or 0.6%, in the first two quarters of 2025, to $250.2 million compared to $248.7 million in the same period of 2024. The increase was primarily due to a $6.9 million increase in company same store sales and a $3.5 million increase from new restaurant revenue partially offset by reduced revenue of $6.3 million from permanent restaurant closures and $2.5 million from refranchising the six company-owned restaurants in the Oregon market as part of the DND Sale. Comparable restaurant sales increased 2.9% system-wide in the first two quarters of 2025 compared to the first two quarters of 2024 comprised of a 3.0% increase at company-owned restaurants and a 2.3% increase at franchise-owned restaurants.
Current report
Cost of Sales
Current report
Labor Costs
Current report
Labor costs increased by $1.3 million, or 1.7%, in the first two quarters of 2025 compared to the same period of 2024. As a percentage of restaurant revenue, labor costs increased to 32.1% in the first two quarters of 2025 compared to 31.7% in the first two quarters of 2024 primarily due to 0.8% of wage inflation and 0.5% increase in labor hours related to new menu rollout, partially offset by a 0.6% benefit from sales leverage and a 0.5% benefit from lower incentive pay and benefits.
Current report
Occupancy Costs
Current report
Occupancy costs decreasedby $0.6 million, or 2.4%, in the first two quarters of 2025 compared to the first two quarters of 2024. As a percentage of restaurant revenue, occupancy costs decreased to 9.3% in the first two quarters of 2025 compared to 9.6% in the first two quarters of 2024 primarily due to sales leverage.
Current report
Other Restaurant Operating Costs
Current report
Other restaurant operating costs increased by $2.7 million, or 5.7%, in the first two quarters of 2025 compared to the first two quarters of 2024. As a percentage of restaurant revenue, other restaurant operating costs increased to 20.4% in the first two quarters of 2025, compared to 19.4% in the first two quarters of 2024, primarily due to 0.65% impact from higher delivery fees driven by higher delivery sales, 0.5% from the new menu rollout which includes increased marketing spend, 0.3% from increased facility and utilities costs, partially offset by 0.4% of sales leverage.
Current report
General and Administrative Expense
Current report
General and administrative expense decreased by $1.4 million, or 5.2%, in the first two quarters of 2025 compared to the first two quarters of 2024, due primarily to lower incentive pay of $0.9 million, lower stock based compensation of $0.6 million and a decrease in legal expenses of $0.3 million, partially offset by higher marketing expenses of $0.5 million. As a percentage of revenue, general and administrative expense decreased to 10.1% in the first two quarters of 2025 from 10.7% in the first two quarters of 2024.
Current report
Depreciation and Amortization
Current report
Depreciation and amortization decreased by $0.5 million, or 3.4%, in the first two quarters of 2025 compared to the first two quarters of 2024, primarily due to restaurant closures.
Current report
Restaurant impairments, closure costs and asset disposals increased $1.7 million to $14.9 million in the first two quarters of 2025 and the first two quarters of 2024. We recorded fixed asset impairment on 15 restaurants and wrote down lease related assets on 11 restaurants in the first two quarters of 2025. We recorded fixed asset impairment on 12 restaurants and wrote down lease related assets onfour restaurants in the first two quarters of 2024.
Current report
Interest Expense
Current report
Interest expense increased by $1.4 million in the first two quarters of 2025 compared to the same period of 2024. The increase was primarily due to higher average borrowings and higher interest rates in the first two quarters of 2025 compared to the first two quarters of 2024.
Current report
Provision for Income Taxes
Removed paragraphs (5)
Previous report
•pricing;
Previous report
Total revenue increased $2.4 million in the first quarter of 2025, or 2.0%, to $123.8 million, compared to $121.4 million in the first quarter of 2024. This increase was primarily due to an increase in same store sales and new restaurant openings, partially offset by restaurant closures and refranchising six restaurants in the second quarter of 2024. System-wide comparable restaurant sales increased 4.4% in the first quarter of 2025 compared to the same period of 2024, comprised of a 4.7% increase at company-owned restaurants and a 2.9% increase at franchise-owned restaurants.
Previous report
Labor costs increased by $1.0 million, or 2.5%, in the first quarter of 2025 compared to the same period of 2024. As a percentage of restaurant revenue, labor cost increased to 32.5% in the first quarter of 2025 compared to 32.3% in the first quarter of 2024 due to wage inflation and one-time training expenses for the new menu rollout, partially offset by sales leverage and lower incentive compensation and benefits.
Previous report
Other restaurant operating costs increased by $2.2 million, or 9.3%, in the first quarter of 2025 compared to the first quarter of 2024. As a percentage of restaurant revenue, other restaurant operating costs increased to 21.1% in the first quarter of 2025 compared to 19.7% in the first quarter of 2024 primarily due to increases in third-party delivery fees, marketing expenses related to the new menu rollout in March and an increase in utilities.
Previous report
Restaurant impairments, closure costs and asset disposals increased $0.1 million in the first quarter of 2025 compared to the first quarter of 2024. The increase was due to impairment charges related to leased assets, partially offset by a gain on lease termination. There were no restaurant fixed assets impaired during either the first quarter of 2025 or the first quarter of 2024.
Reworded paragraphs (24)
Previous wording
In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties such as the number of restaurants we intend to open, projected capital expenditures and estimates of our effective tax rates. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on currently available operating, financial and competitive information. Examples of forward-looking statements include all matters that are not historical facts, such as statements regarding expectations with respect to unit growth and planned restaurant openings and projected capital expenditures. Our actual results may differ materially from those anticipated in these forward-looking statements due to reasons including, but not limited to, our ability to sustain our overall growth, including, our digital sales growth; our ability to open new restaurants on schedule and cause those newly opened restaurants to be successful; our ability to achieve and maintain increases in comparable restaurant sales and to successfully execute our business strategy, including new restaurant initiatives and operational strategies to improve the performance of our restaurant portfolio; the success of our marketing efforts, including our ability to introduce new products; economic conditions, including inflation, an economic recession, an elevated interest rate environment, or tariffs and trade restrictions; price and availability of commodities and other supply chain challenges; our ability to adequately staff our restaurants; changes in labor costs; other conditions beyond our control such as domestic or global conflicts, wars, terrorist activity, weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; and consumer reaction to industry related public health issues and health pandemics, including perceptions of food safety and those discussed in “Special Note Regarding Forward-Looking Statements” and “Risk Factors” as filed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2024.
Current wording
In addition to historical information, this discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks and uncertainties such as the number of restaurants we intend to open, projected capital expenditures and estimates of our effective tax rates. In some cases, you can identify forward-looking statements by terms such as “may,” “might,” “will,” “objective,” “intend,” “should,” “could,” “can,” “would,” “expect,” “believe,” “design,” “estimate,” “predict,” “potential,” “plan” or the negative of these terms and similar expressions intended to identify forward-looking statements. These statements reflect our current views with respect to future events and are based on currently available operating, financial and competitive information. Examples of forward-looking statements include all matters that are not historical facts, such as statements regarding expectations with respect to unit growth and planned restaurant openings, projected capital expenditures and our financial condition and liquidity needs. Our actual results may differ materially from those anticipated in these forward-looking statements due to reasons including, but not limited to, current performance trends and our expectations for future performance and ability to obtain financing on acceptable terms, if at all, and comply with our covenants under the A&R Credit Agreement, our ability to sustain our overall growth, including, our digital sales growth; our ability to open new restaurants, if any, and cause those newly opened restaurants to be successful; our ability to effectively optimize our restaurant portfolio including closures; our ability to achieve and maintain increases in comparable restaurant sales and to successfully execute our business strategy, including operational strategies to improve the performance of our restaurant portfolio; the success of our brand strategy and marketing efforts, including our ability to successfully introduce new menu items, including limited time offerings and the success of our promotions; economic conditions, including inflation, an economic recession, an elevated interest rate environment, or tariffs and trade restrictions; price and availability of commodities and other supply chain challenges; our ability to adequately staff our restaurants; changes in labor costs; other conditions beyond our control such as domestic or global conflicts, wars, terrorist activity, weather, natural disasters, disease outbreaks, epidemics or pandemics impacting our customers or food supplies; and consumer reaction to industry related public health issues and health pandemics, including perceptions of food safety and those discussed in “Special Note Regarding Forward-Looking Statements” and “Risk Factors” as filed in our Annual Report on Form 10-K for our fiscal year ended December 31, 2024 and as updated by Item 1A. Risk Factors of this 10-Q Report.
Previous wording
Revenue. In the first quarter we saw an increase in system-wide comparable restaurant sales, and correspondingly in total revenue. System-wide comparable restaurant sales increased 4.4% in the first quarter of 2025 compared to the same period of 2024, comprised of a 4.7% increase at company-owned restaurants and a 2.9% increase at franchise-owned restaurants.
Current wording
Revenue. In the second quarter we saw an increase in system-wide comparable restaurant sales, and correspondingly in total revenue. System-wide comparable restaurant sales increased 1.5% in the second quarter of 2025 compared to the same period of 2024, comprised of a 1.5% increase at company-owned restaurants and a 1.6% increase at franchise-owned restaurants.
Previous wording
Near-term sales growth remains constrained by macroeconomic uncertainty and current consumer sentiment. We have responded with a comprehensive menu upgrade introduced in March, increased marketing support, a new brand strategy, and increased training in advance of our comprehensive new menu rollout in March.
Current wording
Near-term sales growth remains constrained by macroeconomic uncertainty and current consumer sentiment. We have responded with a comprehensive menu upgrade that we introduced in March along with increased marketing support and a new brand strategy. We plan to continue launching new menu items, including lower priced value offerings.
Previous wording
Cost of Sales. The commodity markets underlying our cost of food have improved since the historically high costs in 2022. Our first quarter commodity inflation was less than 2%. Throughout periods of volatility, we will continue to work with our suppliers to identify ongoing supply chain efficiencies, including adding additional suppliers as necessary. In the first quarter of 2025, we implemented a comprehensive menu upgrade which we expect will increase fiscal year 2025 food costs as some new menu items have a higher cost than the items that were replaced.
Current wording
Cost of Sales. Our first two quarters of 2025 cost of sales were impacted by our comprehensive menu upgrade as some new menu items had a higher cost than the items that were replaced. We continue to monitor commodity inflation and throughout periods of volatility, we will continue to work with our suppliers to identify ongoing supply chain efficiencies, including adding additional suppliers as necessary.
Previous wording
We have evaluated and will continue to evaluate the impact of import laws and tariffs on our operations as some of our produce items are imported from Mexico and other countries. As of April 1, 2025, there was no material impact on our business, financial condition, results of operations or cash flows. However, we expect tariffs may impact our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs, for the remainder of fiscal 2025. We will continue to utilize fixed price contracts for certain key items to mitigate risk.
Current wording
We have evaluated and will continue to evaluate the impact of import laws and tariffs on our operations as some of our food items are imported from Mexico and other countries. As of July 1, 2025, there was no material impact on our business, financial condition, results of operations or cash flows. However, we expect tariffs may impact our operations in certain areas, such as food and beverage costs, construction and equipment costs and other restaurant operating costs, for the remainder of fiscal 2025. We will continue to utilize fixed price contracts for certain key items to mitigate risk.
Previous wording
Restaurant Development. In the first quarter of 2025, we opened one new company-owned restaurant. As of April 1, 2025, we had 369 company-owned restaurants and 91 franchise restaurants in 31 states. In 2025, we will open two new company-owned restaurants.
Current wording
Restaurant Development. In the first two quarters of 2025, we opened two new company-owned restaurants, which completes our restaurant development for 2025. As of July 1, 2025, we had 364 company-owned restaurants and 89 franchise restaurants in 31 states.
Previous wording
Impairments and Certain Restaurant Closures. We did not impair any restaurant fixed assets in the first quarter of 2025. In the first quarter of 2025, we wrote down lease-related assets for one restaurant. We permanently closed three company-owned restaurants in the first quarter of 2025. We continue to analyze our restaurant portfolio and expect to close certain restaurants that are either generating low or negative cash flows, at or are approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends.
Current wording
Impair ments and Certain Restaurant Closures. We impaired fixed assets related to 15 restaurants in the first two quarters of 2025. In the first two quarters of 2025, we wrote down lease-related assets for 11 restaurants. We permanently closed nine company-owned restaurants in the first two quarters of 2025 and we anticipate closing an additional 19 to 23 restaurants in 2025. We continue to analyze our restaurant portfolio and expect to close certain restaurants that are either generating low or negative cash flows, at or are approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends.
Previous wording
We believe that EBITDA and adjusted EBITDA provide clear pictures of our operating results by eliminating certain non-recurring and non-cash expenses that may vary widely from period to period and are not reflective of the underlying business performance.
Current wording
We believe that EBITDA and adjusted EBITDA provide clear pictures of our operating results by eliminating non-cash expenses and certain other expenses that may vary widely from period to period and we believe are not reflective of the underlying business performance.
Previous wording
First Quarter Ended April 1, 2025 Compared to First Quarter Ended April 2, 2024
Current wording
Second Quarter Ended July 1, 2025 Compared to Second Quarter Ended July 2, 2024
Previous wording
The table below presents our unaudited operating results for the first quarters of 2025 and 2024, and the related quarter-over-quarter changes.
Current wording
The table below presents our unaudited operating results for the second quarters of 2025 and 2024, and the related quarter-over-quarter changes.
Previous wording
Occupancy costs decreased by $0.3 million in the first quarter of 2025 compared to the first quarter of 2024. As a percentage of restaurant revenue, occupancy costs decreased to 9.5% in the first quarter of 2025, compared to 9.9% in the first quarter of 2024 primarily due to sales leverage and restaurant closures.
Current wording
Occupancy costs decreased by $0.2 million in the second quarter of 2025 compared to the second quarter of 2024. As a percentage of restaurant revenue, occupancy costs decreased to 9.2% in the second quarter of 2025, compared to 9.3% in the second quarter of 2024 primarily due to sales leverage.
Previous wording
General and administrative expense decreased by $0.2 million, or 1.8%, in the first quarter of 2025 compared to the first quarter of 2024, primarily due to decreases in salary and incentive compensation, partially offset by increased spend related to our new menu rollout. As a percentage of revenue, general and administrative expense decreased to 10.3% in the first quarter of 2025 from 10.7% in the first quarter of 2024.
Current wording
General and administrative expense decreased by $1.2 million, or 8.6%, in the second quarter of 2025 compared to the second quarter of 2024, primarily due to lower stock based compensation of $0.4 million, a decrease in legal expenses of $0.3 million and lower compensation of $0.3 million. As a percentage of revenue, general and administrative expense decreased to 9.8% in the second quarter of 2025 from 10.7% in the second quarter of 2024.
Previous wording
Depreciation and amortization decreased by $0.3 million, or 3.8%, in the first quarter of 2025 compared to the first quarter of 2024, due primarily to restaurant closures since the first quarter of 2024.
Current wording
Depreciation and amortization decreased by $0.2 million, or 3.1%, in the second quarter of 2025 compared to the second quarter of 2024, due primarily to restaurant closures since the second quarter of 2024.
Previous wording
Interest expense, net increased $0.7 million in the first quarter of 2025 compared to the first quarter of 2024, due primarily to higher average debt balances in the first quarter of 2025 as compared to the first quarter of 2024.
Current wording
Interest expense, net increased $0.8 million in the second quarter of 2025 compared to the second quarter of 2024, due primarily to higher average debt balances in the second quarter of 2025 as compared to the second quarter of 2024.
Previous wording
The effective tax rate for the first quarter of 2025 and for the first quarter of 2024 reflect the impact of the previously recorded valuation allowance. The primary components of the provision for income tax (for both quarters) are related to state tax and the change in our valuation allowance. For the remainder of fiscal 2025, we do not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. We will maintain a valuation allowance against deferred tax assets until there is sufficient evidence to support a full or partial reversal. The reversal of a previously recorded valuation allowance will generally result in a benefit from income tax.
Current wording
The effective tax rate for the second quarter of 2025 and for the second quarter of 2024 reflect the impact of the previously recorded valuation allowance. The primary components of the provision for income tax (for both quarters) are related to state tax and the change in our valuation allowance. For the remainder of fiscal 2025, we do not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. We will maintain a valuation allowance against deferred tax assets until there is sufficient evidence to support a full or partial reversal. The reversal of a previously recorded valuation allowance will generally result in a benefit from income tax.
Previous wording
Cost of sales increased by $2.6 million, or 8.7%, in the first quarter of 2025 compared to the same period of 2024. As a percentage of restaurant revenue, cost of sales increased to 26.6% in the first quarter of 2025 compared to 25.0% in first quarter of 2024 primarily due to the impacts of new menu offerings added since the first quarter of 2024 and inflation.
Current wording
Cost of sales increased by $4.6 million, or 7.6%, in the first two quarters of 2025 compared to the same period of 2024. As a percentage of restaurant revenue, cost of sales increasedto 26.6% in the first two quarters of 2025 compared to 24.8% in the first two quarters of 2024 primarily due to a 1.9% impact from a combination of menu investments, menu mix shifts and inflation.
Previous wording
We believe that we will be in compliance with our debt covenants and have sufficient sources of cash to meet our liquidity needs and capital resource requirements for at least the next twelve months, through currently available cash and cash equivalents, availability under our revolving credit facilityand cash flows from operations.
Current wording
We believe that we will have sufficient sources of cash to meet our liquidity needs and capital resource requirements for at least the next twelve months, through currently available cash and cash equivalents, availability under our revolving credit facility and cash flows from operations. We were in compliance with our covenants as of July 1, 2025, and expect to continue to be in compliance for the next twelve months. The required Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) steps down from the current requirement of 5.50 to 1.00 to 5.25 to 1.00 for the fourth quarter of fiscal year 2025, and then further steps down to 5:00 to 1.00 for the first two quarters of fiscal 2026. The required Minimum Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) steps up from the current requirement of 1.05 to 1.00 to 1.15 to 1.00 for the fourth quarter of fiscal year 2025 and the first quarter of fiscal 2026, and then further steps up to 1.25 to 1.00 for the second quarter of fiscal 2026.
Previous wording
Net cash provided by operating activities was $4.0 million in the first quarter of 2025 compared to net cash provided by operating activities of $7.0 million in the first quarter of 2024. The decrease in operating cash flow resulted primarily from a decrease in net income as adjusted for non cash items including depreciation and impairments, as well as changes in working capital related to the timing of accounts payable, payroll and accrued liabilities.
Current wording
Net cash provided by operating activities was $3.2 million in the first two quarters of 2025 compared to net cash provided by operating activities of $11.7 million in the first two quarters of 2024. The decrease in operating cash flow resulted primarily from a decrease in net income as adjusted for non cash items including depreciation and impairments, as well as changes in working capital related to the timing of accounts payable, payroll and accrued liabilities.
Previous wording
Net cash used in investing activities decreased $5.7 million to $2.9 million in the first quarter of 2025 from $8.6 million in the first quarter of 2024. This decrease was primarily due to decreased investment in new restaurants and restaurant technology.
Current wording
Net cash used in investing activities decreased $9.5 million to $6.3 million in the first two quarters of 2025 from $15.8 million in the first two quarters of 2024. This decrease was primarily due to decreased investment in new restaurants and restaurant technology.
Previous wording
Net cash used in financing activities was $0.9 million in the first quarter of 2025, compared to $37 thousand in the first quarter of 2024. The increase from the first quarter of 2024 was primarily due to repayments on the swingline, partially offset by borrowings on the revolver.
Current wording
Net cash provided by financing activities was $4.3 million in the first two quarters of 2025, compared to $2.8 million in the first two quarters of 2024. The increase from the first two quarters of 2024 was primarily due to borrowings on the revolver as a result of the decrease in cash provided by operating activities, partially offset by repayments on the swingline.
Previous wording
We estimate capital expenditures will be approximately $11.0 million to $13.0 million for fiscal year 2025, including $8.0 million to $10.0 million for the remainder of the year, primarily for the reinvestment in existing restaurants, investments in technology and the opening of one additional company-owned restaurant. We expect such capital expenditures to be funded by currently available cashand cash equivalents, cash flows from operations and if necessary, undrawn capacity under our revolving credit line.
Current wording
We estimate capital expenditures will be approximately $12.0 million to $13.0 million for fiscal year 2025, including $5.0 million to $6.0 million for the remainder of the year, primarily for the reinvestment in existing restaurants and investments in technology. We expect such capital expenditures to be funded by currently available cashand cash equivalents, cash flows from operations and if necessary, undrawn capacity under our revolving credit line.
Previous wording
Liquidity. As of April 1, 2025, we had a cash balance of $1.4 million compared to $1.1 million asof December 31, 2024. The amount available for future borrowings under our A&R Credit Agreement (defined below) was $19.3 million as of April 1, 2025. We believe that our current cash and cash equivalents, the expected cash flows from company-owned restaurant operations, the expected franchise fees and royalties and available borrowings under the credit facility will be sufficient to fund our cash requirements for working capital needs, new restaurant openings, and capital improvements and maintenance of existing restaurants for at least the next twelve months.
Current wording
Liquidity. As of July 1, 2025, we had a cash balance of $2.3 million compared to $1.1 million asof December 31, 2024. The amount available for future borrowings under our A&R Credit Agreement (defined below) was $13.7 million as of July 1, 2025. We believe that our current cash and cash equivalents, the expected cash flows from company-owned restaurant operations, the expected franchise fees and royalties and available borrowings under the revolving credit facility will be sufficient to fund our cash requirements for working capital needs and capital improvements and maintenance of existing restaurants for at least the next twelve months.
Previous wording
On October 29, 2024, we amended our A&R Credit Agreement, by entering into that certain Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”). Among the modifications, the Second Amendment: (i) increased the maximum applicable rate ranges (A) with respect to SOFR loans, from 1.75% - 3.00% to 1.75% - 3.75% per annum and (B) with respect to base rate loans, from 0.75% - 2.00% to 0.75% - 2.75% per annum, in each case as determined by the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement), (ii) conditioned the use of the general restricted payment basket on satisfaction of a Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) of less than or equal to 4.00 to 1.00 and a Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) of greater than or equal to 1.25 to 1.00, (iii) restricted entry into new lease agreements so long as the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(a) of the A&R Credit Agreement is greater than or equal to 4.50 to 1.00, (iv) increased the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(a) of the A&R Credit Agreement to be no greater than (x) 5.50 to 1.00 for the fiscal quarter ending on October 1, 2024 until and including the last day of the fiscal quarter ending September 30, 2025 and (y) stepping down to (1) 5.25 to 1.00 per annum for the fiscal quarter ending December 30, 2025, (2) 5.00 to 1.00 per annum for the fiscal quarters ending March 31, 2026 and June 30, 2026, (3) 4.75 to 1.00 for the fiscal quarters ending September 29, 2026 and December 29, 2026 and (4) 4.50 to 1.00 per annum for the fiscal quarter ended March 30, 2027 and thereafter and (v) amended the Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(b) of the A&R Credit Agreement to be no less than (x) 1.05 to 1.00 for the fiscal quarter ending on October 1, 2024 until and including the last day of the fiscal quarter ending September 30, 2025 and (y) stepping up to (1) 1.15 to 1.00 for the fiscal quarters ending December 30, 2025 and March 31, 2026 and (2) 1.25 to 1.00 for the fiscal quarter ending June 30, 2026 and thereafter.
Current wording
On October 29, 2024, we amended our A&R Credit Agreement, by entering into that certain Second Amendment to Amended and Restated Credit Agreement (the “Second Amendment”). Among the modifications, the Second Amendment: (i) increased the maximum applicable rate ranges (A) with respect to SOFR loans, from 1.75% - 3.00% to 1.75% - 3.75% per annum and (B) with respect to base rate loans, from 0.75% - 2.00% to 0.75% - 2.75% per annum, in each case as determined by the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement), (ii) conditioned the use of the general restricted payment basket on satisfaction of a Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) of less than or equal to 4.00 to 1.00 and a Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) of greater than or equal to 1.25 to 1.00, (iii) restricted entry into new lease agreements so long as the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(a) of the A&R Credit Agreement is greater than or equal to 4.50 to 1.00, (iv) increased the Consolidated Total Lease Adjusted Leverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(a) of the A&R Credit Agreement to be no greater than (x) 5.50 to 1.00 for the fiscal quarter ending on October 1, 2024 until and including the last day of the fiscal quarter ending September 30, 2025 and (y) stepping down to (1) 5.25 to 1.00 for the fiscal quarter ending December 30, 2025, (2) 5.00 to 1.00 for the fiscal quarters ending March 31, 2026 and June 30, 2026, (3) 4.75 to 1.00 for the fiscal quarters ending September 29, 2026 and December 29, 2026 and (4) 4.50 to 1.00 for the fiscal quarter ended March 30, 2027 and thereafter and (v) amended the Consolidated Fixed Charge Coverage Ratio (as defined in the A&R Credit Agreement) in Section 7.11(b) of the A&R Credit Agreement to be no less than (x) 1.05 to 1.00 for the fiscal quarter ending on October 1, 2024 until and including the last day of the fiscal quarter ending September 30, 2025 and (y) stepping up to (1) 1.15 to 1.00 for the fiscal quarters ending December 30, 2025 and March 31, 2026 and (2) 1.25 to 1.00 for the fiscal quarter ending June 30, 2026 and thereafter.
Previous wording
As of April 1, 2025, we had $102.7 million of indebtedness (excluding $2.0 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under our A&R Credit Agreement.
Current wording
As of July 1, 2025, we had $108.3 million of indebtedness (excluding $1.8 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under our A&R Credit Agreement.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
The table below presents our unaudited operating results for the first two quarters of 2025 and 2024, and the related period-over-period changes.
Current report — wording carried from elsewhere
Restaurant Impairments, Closure Costs and Asset Disposals
Current report — wording carried from elsewhere
The effective tax rate for the first two quarters of 2025 and for the first two quarters of 2024 reflect the impact of the previously recorded valuation allowance. The primary components of the provision for income tax (for both quarters) are related to state tax and the change in our valuation allowance. For the remainder of fiscal 2025, we do not anticipate material income tax expense or benefit as a result of the valuation allowance recorded. We will maintain a valuation allowance against deferred tax assets until there is sufficient evidence to support a full or partial reversal. The reversal of a previously recorded valuation allowance will generally result in a benefit from income tax. We estimate the annual effective tax rate for 2025 to be between (1.0%) and (0%).