NOODLES & Co
For the period ended Dec 30, 2025. Filed Mar 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Mar 26, 2026
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-K
Period ended 2024-12-31; filed 2025-03-07.
0001275158-25-000016
Item 7. Management's Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-30; filed 2026-03-26.
0001275158-26-000021
Item 7. 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 126 previous paragraphs and 133 current paragraphs.
83 unchanged; 35 reworded; 15 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 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 (15)
Current report
Reverse Stock Split. On February 18, 2026, the amendment to our Amended and Restated Certificate of Incorporation (the “Certificate of Incorporation”) took effect to implement the Reverse Stock Split of our issued and outstanding shares of Class A common stock, par value $0.01 per share, at a ratio of 1-for-8.
Current report
No fractional shares were issued as a result of the Reverse Stock Split and it did not impact the par value of our common stock. Neither the Reverse Stock Split nor the related amendment to the Certificate of Incorporation had any impact on the number of shares of common stock or preferred stock we are authorized to issue under the Certificate of Incorporation or the number of issued and outstanding shares of our preferred stock (of which there are currently none).
Current report
All shares of common stock, stock-based compensation awards and per share amounts included in the Consolidated Financial Statements and applicable notes thereto in Part II, Item 8 of this Report and elsewhere in this Report have been retrospectively restated to reflect the effect of the Reverse Stock Split and related amendment to the Certificate of Incorporation.
Current report
Strategic Review. On September 3, 2025, we announced that our Board of Directors had initiated a review of strategic alternatives in order to explore ways to maximize stockholder value. The review was set to include a range of potential strategic alternatives, including a refinancing of existing indebtedness or sale of all or part of the business, and/or other strategic or financial transactions. Such review remains in process.
Current report
Revenue. In fiscal 2025, we saw an increase in revenue as a result of an increase in comparable restaurant sales, partially offset by restaurant closures. System-wide comparable restaurant sales increased 4.1%, comprised of a 4.3% increase for company-owned restaurants and a 3.2% increase for franchise restaurants. Starting in the third quarter of 2025 and continuing into the early part of 2026 we have seen our sales outpace the overall fast casual industry as measured by Blackbox. Our comparable restaurant sales have been positive since the introduction of our new menu aided by the introduction of Delicious Duos in late July, the introduction of Chili Garlic Ramen in October, and the benefit of sales transferring from restaurants that we closed to our nearby restaurants.
Current report
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 India, Mexico and other countries. As of December 30, 2025, there was no material impact on our business, financial condition, results of operations or cash flows. However, the tariffs continue to change and 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 into 2026. We will continue to utilize fixed price contracts for certain key items to mitigate risk.
Current report
•pricing and perceived value;
Current report
•tariffs or trade restrictions; and
Current report
Interest Expense, Net
Current report
Total revenue increased by $1.8 million, or 0.4%, in 2025 compared to 2024. The increase was primarily due to an $18.2 million increase in company same store sales, a $4.4 million increase from new restaurant revenue mostly offset by a decrease of $18.3 million from permanent restaurant closures and a decrease of $2.5 million from refranchising.
Current report
Occupancy costs decreased by $1.7 million, or 3.8%, in 2025 compared to 2024, due primarily to restaurant closures. As a percentage of restaurant revenue, occupancy costs decreased to 9.2% in 2025 from 9.6% in 2024, primarily due to sales leverage.
Current report
General and administrative expense decreased by $1.7 million, or 3.3%, in 2025 compared to 2024, primarily due to a decrease in severance costs, lower stock based compensation, and lower labor costs partially offset by higher marketing expenses and software maintenance. As a percentage of revenue, general and administrative expense decreased to 9.9% in 2025 from 10.3% in 2024.
Current report
Interest Expense, Net
Current report
The Company also maintains outstanding letters of credit to secure obligations under its workers’ compensation program and certain lease obligations. As of December 30, 2025, the Company was in compliance with all of its debt covenants.
Current report
The Company’s revolver, which had a balance of $109.8 million as of December 30, 2025, bore interest at rates between 7.58%to 10.25% during 2025. The Company’s swingline, which had a balance of $0.4 million as of December 30, 2025, bore interest at rates between 9.50% and 10.25% in 2025. The Company recorded interest expense of $10.9 million, $8.4 million and $4.8 million for 2025, 2024 and 2023, respectively, of which $0.9 million, $0.6 million and $0.4 million was amortization of debt issuance costs in each of the respective years.
Removed paragraphs (8)
Previous report
Comparable Restaurant Sales. In fiscal 2024, system-wide comparable restaurant sales decreased 1.5%, comprised of a 1.8% decrease for company-owned restaurants and a 0.2% decrease for franchise restaurants. Restaurant industry sales remain volatile, with elevated levels of discounting targeting increasingly price-sensitive consumers. Our sales have been impacted by the challenging consumer environment and we responded with added promotional support in the fourth quarter of 2024. The consumer environment has caused many restaurant companies to report a decreased level of same store sales in 2024, and our sales trends have followed. We are focusing on revitalizing our menu options and began implementing menu changes late in 2024 and into the first half of 2025 when the substantial portion of the rollout is to be completed nationally. We are taking these and other actions to address these declines, but there is no guarantee these actions will ultimately be successful and we cannot predict the extent and duration of this decline.
Previous report
•pricing;
Previous report
Interest Expense
Previous report
Not meaningful.
Previous report
Total revenue decreased by $10.1 million, or 2.0%, in 2024 compared to 2023. This decrease was primarily due to: $8.3 million from a decline in company same store sales, $7.1 million due to refranchising and $6.7 million due to permanent restaurant closures, partially offset by $12.0 million from growth in new restaurant revenue.
Previous report
Occupancy costs increased by $0.4 million, or 1.0%, in 2024 compared to 2023, due primarily to new restaurant openings. As a percentage of restaurant revenue, occupancy costs increased to 9.6% in 2024 from 9.3% in 2023, due primarily to a decrease in restaurant revenue.
Previous report
General and administrative expense decreased by $1.0 million, or 1.9%, in 2024 compared to 2023, due primarily to decreases in wages and labor expenses of $1.5 million partially offset by increases in marketing spend and expenses related to our bi-annual manager conference. As a percentage of revenue, general and administrative expense remained flat at 10.3% in 2024 and 2023.
Previous report
Interest Expense
Reworded paragraphs (35)
Previous wording
Noodles & Company is a restaurant concept offering lunch and dinner within the fast-casual segment of the restaurant industry. We opened our first location in 1995, offering noodle and pasta dishes, staples of many different cuisines, with the goal of delivering fresh ingredients and flavors from around the world under one roof. Today, our globally-inspired menu includes a wide variety of high quality, cooked-to-order dishes, including noodles and pasta, soups, salads and appetizers. We believe we offer our customers value with a per-person spend of $13.31 in 2024.
Current wording
Noodles & Company is a restaurant concept offering lunch and dinner within the fast-casual segment of the restaurant industry. We opened our first location in 1995, offering noodle and pasta dishes, staples of many different cuisines, with the goal of delivering fresh ingredients and flavors from around the world under one roof. Today, our globally-inspired menu includes a wide variety of high quality, cooked-to-order dishes, including noodles and pasta, soups, salads and appetizers. We believe we offer our customers value with a per-person spend of $13.86 in 2025.
Previous wording
Labor Costs. Similar to much of the restaurant industry, our base labor costs have risen in recent years. In 2024, we have seen the rate of wage inflation decrease. Our wage inflation in 2024 was less than 3%. We have been able to partially mitigate the impact of wage inflation through a continued focus on maximizing efficiencies of labor hour usage per restaurant.
Current wording
Labor Costs. Similar to much of the restaurant industry, our base labor costs have risen in recent years. We have been able to partially mitigate the impact of wage inflation through a continued focus on maximizing efficiencies of labor hour usage per restaurant and wage inflation has stabilized to less than 3%.
Previous wording
Other Restaurant Operating Costs. We have and expect to continue to incur third-party delivery fees resulting from a significant and increasing use of third-party delivery services.
Current wording
Other Restaurant Operating Costs. We have incurred, and expect to continue to incur, increased third-party delivery fees due to significant increased usage of third-party delivery services resulting in a higher mix of third party delivery sales.
Previous wording
Restaurant Development. In 2024, we opened ten company-owned restaurants andthree franchise restaurants. As of December 31, 2024, we had 371 company-owned restaurants and 92 franchise restaurants in 31 states. In 2025, we plan to open two new company-owned restaurants.
Current wording
Restaurant Development. In 2025, we opened two company-owned restaurants. As of December 30, 2025, we had 340 company-owned restaurants and 83 franchise restaurants in 31 states. We do not plan to open any new company-owned restaurants in 2026.
Previous wording
Certain Restaurant Closures. We closed thirteen and six company-owned restaurants in 2024 and 2023, respectively, most of which were either generating low or negative cash flows, at or approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends. We continue to analyze our restaurant portfolio and expect toclose certain restaurants that areeither generating low or negative cash flows, at or approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends.
Current wording
Certain Restaurant Closures. We closed 33 and 13 company-owned restaurants in 2025 and 2024, respectively, most of which were either generating low or negative cash flows, at or approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends or a potential for a significant amount of sales transfer given strong off premise sales. We continue to analyze our restaurant portfolio and expect toclose approximately 30 to 35 restaurants in 2026, of which 19 have already been closed in the first two months of 2026, that areeither generating low or negative cash flows, at or approaching the expiration of their leases or in trade areas that are not as well positioned for current consumer trends or a potential for a significant amount of sales transfer given strong off premise sales.
Previous wording
Impairment of Long-lived Assets. We impaired sixteen restaurants in 2024 and two restaurants in 2023. We performed a detailed review of significantly underperforming restaurants in 2024 and based on this review, recorded impairments on certain restaurants that we believed had fair market values below their net book values. Impairment is based on our current assessment of the expected future cash flows of various restaurants based on recent results and other specific market factors.
Current wording
Impairment of Long-lived Assets. We impaired fixed assets related to 25 restaurants in 2025 and 16 restaurants in 2024 primarily related to closure decisions on underperforming restaurants. Impairment is based on our current assessment of the expected future cash flows of various restaurants based on recent results and other specific market factors.
Previous wording
Comparable restaurant sales refer to year-over-year sales comparisons for the comparable restaurant base. We define the comparable restaurant base to include restaurants open for at least 18 full periods. As of the end of 2024, 2023 and 2022, there were 350, 355 and 347 restaurants, respectively, in our comparable restaurant base for company-owned locations. This measure highlights performance of existing restaurants, as the impact of new restaurant openings is excluded. Changes incomparable restaurant sales are generated by changes in traffic, which we calculate as the number of entrées sold, and changes in per-person spend, calculated as sales divided by traffic. Per-person spend can be influenced by changes in menu prices and the mix and number of items sold per person.
Current wording
Comparable restaurant sales refer to year-over-year sales comparisons for the comparable restaurant base. We define the comparable restaurant base to include restaurants open for at least 18 full periods. As of the end of 2025, 2024 and 2023, there were 335, 350 and 355 restaurants, respectively, in our comparable restaurant base for company-owned locations. This measure highlights performance of existing restaurants, as the impact of new restaurant openings is excluded. Changes incomparable restaurant sales are generated by changes in traffic, which we calculate as the number of entrées sold, and changes in per-person spend, calculated as sales divided by traffic. Per-person spend can be influenced by changes in menu prices and the mix and number of items sold per person.
Previous wording
•introduction of new and seasonal menu items and limited time offerings; and
Current wording
•introduction of new and seasonal menu items and limited time offerings;
Previous wording
Consistent with common industry practice, we present comparable restaurant sales on a calendar-adjusted basis that aligns current year sales weeks with comparable periods in the prior year, regardless of whether they belong to the same fiscal period or not. Since opening new company-owned and franchise restaurants is a part of our long-term growth strategy and we anticipate new restaurants will be a component of our long-term revenue growth, comparable restaurant sales is only one measure of how we evaluate our performance.
Current wording
Consistent with common industry practice, we present comparable restaurant sales on a calendar-adjusted basis that aligns current year sales weeks with comparable periods in the prior year, regardless of whether they belong to the same fiscal period or not. Comparable restaurant sales is only one measure of how we evaluate our performance.
Previous wording
AUVs consist of the average annualized sales of all company-owned restaurants for a given time period. AUVs are calculated by dividing restaurant revenue by the number of operating days within each time period and multiplying by the number of operating days we have in a typical year. Based on this calculation, temporarily closed restaurants are excluded from the definition of AUV, however restaurants with temporarily reduced operating hours are included. This measurement allows management to assess changes in consumer traffic and per-person spending patterns at our restaurants. In addition to the factors that impact comparable restaurant sales, AUVs can be further impacted by effective real estate site selection and maturity and trends within new markets.
Current wording
AUVs consist of the average annualized sales of all company-owned restaurants for a given time period. AUVs are calculated by dividing restaurant revenue by the number of operating days within each time period and multiplying by the number of operating days we have in a typical year. This measurement allows management to assess changes in consumer traffic and per-person spending patterns at our restaurants. In addition to the factors that impact comparable restaurant sales, AUVs can be further impacted by effective real estate site selection and maturity and trends within new markets.
Previous wording
We define EBITDA as net income (loss) before net interest expense, provision (benefit) for income taxes and depreciation and amortization. We define adjusted EBITDA as net income (loss) before net interest expense, provision (benefit) for income taxes, depreciation and amortization, restaurant impairments, loss on disposal of assets, net lease exit costs (benefits), gain (loss) on sale of restaurants, severance and executive transition costs and stock-based compensation.
Current wording
We define EBITDA as net income (loss) before net interest expense, provision (benefit) for income taxes and depreciation and amortization. We define adjusted EBITDA as net income (loss) before net interest expense, provision (benefit) for income taxes, depreciation and amortization, restaurant impairments, loss on disposal of assets, net lease exit costs (benefits), gain (loss) on sale of restaurants, severance, executive transition costs, corporate transaction costs and stock-based compensation.
Previous wording
Interest expense consists primarily of interest on our outstanding indebtedness and amortization of debt issuance costs over the life of the related debt reduced by capitalized interest.
Current wording
Interest expense, net consists primarily of interest on our outstanding indebtedness and amortization of debt issuance costs over the life of the related debt reduced by capitalized interest.
Previous wording
Average unit volumes decreased 3.0% to $1.29 million in 2024 compared to $1.33 million in 2023 primarily due to decreases in traffic. System-wide comparable restaurant sales decreased 1.5% in 2024, comprised of a 1.8% decrease at company-owned restaurants and a 0.2% decrease at franchise-owned restaurants.
Current wording
Average unit volumes increased 5.5% to $1.36 million in 2025 compared to $1.29 million in 2024 primarily due to increases in same store sales and the closure of underperforming restaurants. System-wide comparable restaurant sales increased 4.1% in 2025, comprised of a 4.3% increase at company-owned restaurants and a 3.2% increase at franchise-owned restaurants.
Previous wording
Cost of sales decreased by $0.4 million, or 0.3%, in 2024 compared to 2023. As a percentage of restaurant revenue, cost of sales increased to 25.6% in 2024 from 25.2% in 2023, primarily due to a 0.8% impact from a combination of menu mix shifts and inflation, partially offset by a 0.4% benefit from menu price increases.
Current wording
Cost of sales increased by $3.5 million, or 2.8%, in 2025 compared to 2024. As a percentage of restaurant revenue, cost of sales increased to 26.2% in 2025 from 25.6% in 2024, primarily due to a 1.4% impact from a combination of new menu investments, menu mix shifts, and inflation partially offset by a 0.8% benefit from menu price and vendor rebates.
Previous wording
Labor costs decreased by $3.4 million, or 2.1%, in 2024 compared to 2023. As a percentage of restaurant revenue, labor costs decreased to 31.9% in 2024 compared to 32.0% in 2023, primarily due to a 0.5% benefit from menu price increases, a 0.5% benefit from labor efficiencies and a 0.5% benefit from a combination of lower incentive pay and benefits, partially offset by increases of 0.8% from traffic deleverage and 0.6% from wage inflation.
Current wording
Labor costs decreased by $0.9 million, or 0.6%, in 2025 compared to 2024. As a percentage of restaurant revenue, labor costs decreased to 31.6% in 2025 compared to 31.9% in 2024, primarily due to a 1.1% benefit from sales leverage and a 0.2% benefit from lower incentive pay and benefits partially offset by 0.7% of wage inflation and 0.4% from a temporary increase in labor hours related to the new menu rollout.
Previous wording
Other restaurant operating costs increased by $3.5 million, or 3.8%, in 2024 compared to 2023. As a percentage of restaurant revenue, other restaurant operating costs increased to 19.7% in 2024 from 18.6% in 2023, primarily due to a 0.5% impact from higher delivery fees driven by higher delivery sales, a 0.4% impact from sales deleverage, and a 0.3% impact from increased marketing spend in 2024.
Current wording
Other restaurant operating costs increased by $3.8 million, or 4.0%, in 2025 compared to 2024. As a percentage of restaurant revenue, other restaurant operating costs increased to 20.4% in 2025 from 19.7% in 2024, primarily due to 0.5% impact from higher delivery fees driven by higher delivery sales and 0.3% from increased marketing spend.
Previous wording
Depreciation and amortization increased by $2.3 million, or 8.5%, in 2024 compared to 2023, due primarily to new restaurant and technology investments, partially offset by restaurants impaired or closed. As a percentage of revenue, depreciation and amortization increased to 5.9% in 2024 compared to 5.3% in 2023.
Current wording
Depreciation and amortization decreased by $2.0 million, or 6.9%, in 2025 compared to 2024, due primarily to restaurants impaired or closed during 2025. As a percentage of revenue, depreciation and amortization decreased to 5.5% in 2025 compared to 5.9% in 2024.
Previous wording
Pre-opening costs decreased $0.7 million in 2024 compared to 2023 due to less new restaurant openings in 2024 compared to 2023.
Current wording
Pre-opening costs decreased by $1.3 million, or 85.4%, in 2025 compared to 2024 due to less new restaurant openings in 2025 compared to 2024.
Previous wording
Restaurant impairments, closure costs and asset disposals increased by $11.9 million, or 141.3%, in 2024 compared to 2023. The increase was largely due to an increase in write-downs of lease related assets and fixed asset impairment charges with sixteen restaurants impaired in 2024 compared to two restaurants impaired in 2023. We performed a detailed review of significantly underperforming restaurants in 2024 and based on this review, recorded impairments on certain restaurants that we believed had fair market values below their net book values. Both years include ongoing equipment costs for restaurants previously impaired and lease related costs and expenses in connection with the divestiture of company-owned restaurants in previous years.
Current wording
Restaurant impairments, closure costs and asset disposals increased by $6.0 million, or 29.6%, in 2025 compared to 2024. The increase was largely due to an increase in write-downs of lease related assets and fixed asset impairment charges with 25 restaurants impaired in 2025 compared to 16 restaurants impaired in 2024 primarily related to closure decisions on underperforming restaurants. This was partially offset by a decline in closure costs as a result of lease remeasurement gains. 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. Both years include ongoing equipment costs for restaurants previously impaired and lease related costs and expenses in connection with the divestiture of company-owned restaurants in previous years.
Previous wording
Interest expense increased by $3.6 million, or 74.5% in 2024 compared to 2023. The increase was mainly due to higher average borrowings and a higher average interest rate in 2024 compared to 2023. Interest rates for all amounts outstanding are variable.
Current wording
Interest expense, net increased by $2.5 million, or 30.2% in 2025 compared to 2024. The increase was primarily due to higher average borrowings in 2025 compared to 2024. Interest rates for all amounts outstanding are variable.
Previous wording
The effective tax rate was (0.1)% in 2024 compared to (0.2)% in 2023. We will continue to 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 was(0.2)% in 2025 compared to (0.1)% in 2024. We will continue to 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
As of December 31, 2024, our available cash and cash equivalents balance was $1.1 million, and $19.0 million was available for future borrowings underour A&R Credit Agreement (defined below).
Current wording
As of December 30, 2025, our available cash and cash equivalents balance was $1.3 million, and $11.9 million was available for future borrowings underour A&R Credit Agreement.
Previous wording
On May 9, 2018, we entered into a Credit Agreement (the “Credit Agreement”) with each other Loan Party (as defined in the Credit Agreement) party thereto, each lender from time to time party thereto, and U.S. Bank National Association, as Administrative Agent, L/C Issuer and Swing Line Lender (each as defined in the Credit Agreement). The Credit Agreement consisted of a term loan facility in an aggregate principal amount of $25.0 million and a revolving line of credit of $65.0 million, which included a letter of credit subfacility in the amount of $15.0 million and a swingline subfacility in the amount of $10.0 million. The Credit Agreement was subsequently amended on November 20, 2019 and June 16, 2020. On July 27, 2022, we amended and restated our Credit Agreement by entering into the Amended and Restated Credit Agreement (as further amended, restated, extended, supplemented, modified and otherwise in effect from time to time, the “A&R Credit Agreement”), with each other Loan Party (as defined in the A&R Credit Agreement) party thereto, each lender from time to time party thereto, and U.S. Bank National Association, as Administrative Agent, L/C Issuer and Swing Line Lender (each as defined in the A&R Credit Agreement). The A&R Credit Agreement matures on July 27, 2027. Among other things, the A&R Credit Agreement: (i) increased the credit facility from $100.0 million to $125.0 million and (ii) eliminated the term loan and principal amortization components of the credit facility. The A&R Credit Agreement was subsequently amended on December 21, 2023.
Current wording
On July 27, 2022, we amended and restated our Credit Agreement by entering into the Amended and Restated Credit Agreement (as further amended, restated, extended, supplemented, modified and otherwise in effect from time to time, the “A&R Credit Agreement” or the “credit agreement”), with each other Loan Party (as defined in the A&R Credit Agreement) party thereto, each lender from time to time party thereto, and U.S. Bank National Association, as Administrative Agent, L/C Issuer and Swing Line Lender (each as defined in the A&R Credit Agreement). The A&R Credit Agreement matures on July 27, 2027. Among other things, the A&R Credit Agreement: (i) increased the credit facility from $100.0 million to $125.0 million; (ii) eliminated the term loan and principal amortization components of the credit facility; (iii) removed the Company’s capital expenditure covenant; (iv) enhanced flexibility for certain covenants and restrictions; and (v) lowered the spread of the Company’s cost of borrowing and transitioned from the London Interbank Offered Rate (“LIBOR”) to the Secured Overnight Financing Rate (“SOFR”) plus a margin of 1.50% to 2.50% per annum, based upon the consolidated total lease-adjusted leverage ratio. The A&R Credit Agreement is secured by a pledge of stock of substantially all of the Company’s subsidiaries and a lien on substantially all of the personal property assets of the Company and its subsidiaries. The A&R Credit Agreement was subsequently amended on December 21, 2023.
Previous wording
On October 29, 2024, the Company amended its 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, the Company further amended its 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 with respect to certain loans, (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 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.
Previous wording
As of December 31, 2024, we had $103.0 million of indebtedness (excluding $2.3 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under the A&R Credit Agreement.
Current wording
As of December 30, 2025, the Company had $110.2 million of indebtedness (excluding $1.4 million of unamortized debt issuance costs) and $3.0 million of letters of credit outstanding under the A&R Credit Agreement.
Previous wording
Availability of borrowings under the A&R Credit Agreement is conditioned upon our compliance with the terms of the A&R Credit Agreement, including the financial covenants and other customary affirmative and negative covenants, such as limitations on additional borrowings, acquisitions, dividend payments and lease commitments, and customary representations and warranties. As of December 31, 2024, we were in compliance with all of our debt covenants.
Current wording
Availability of borrowings under the A&R Credit Agreement is conditioned upon the Company’s compliance with the terms of the A&R Credit Agreement, including the financial covenants and other customary affirmative and negative covenants, such as limitations on additional borrowings, acquisitions, dividend payments and lease commitments, and customary representations and warranties. As of December 30, 2025, the Company was in compliance with all of its debt covenants.
Previous wording
We expect that we will meet all applicable financial covenants in our A&R Credit Agreement through at least the next four fiscal quarters. However, there can be no assurance we will meet such financial covenants. If such covenants are not met, we would be required to seek a waiver or amendment from the banks participating in the credit facility. There can be no assurance that such waiver or amendment would be granted, which could have a material adverse impact on our liquidity.
Current wording
The Company expects to meet all applicable financial covenants in its A&R Credit Agreement through at least the next four fiscal quarters. However, there can be no assurance that the Company will meet such financial covenants. If such covenants are not met, the Company would be required to seek a waiver or amendment from the banks participating in the credit facility. There can be no assurance that such waiver or amendment would be granted, which could have a material adverse impact on the Company’s liquidity.
Previous wording
Net cash provided by operating activities in 2024 was $7.6 million compared to $27.5 million in 2023. The decrease in operating cash flows 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 payroll timing and normal changes in accounts payable and other accrued expenses.
Current wording
Net cash provided by operating activities in 2025 was $7.3 million compared to $7.6 million in 2024. The decrease in operating cash flows 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 payroll timing and normal changes in accounts payable and other accrued expenses.
Previous wording
Net cash used in investing activities decreased $25.1 million to $26.7 million in 2024 compared to 2023. This decrease was primarily due to decreased investment in new restaurant openings and the completion of installation for our digital menu boards in 2023. We opened ten and eighteen company-owned restaurants in 2024 and 2023, respectively.
Current wording
Net cash used in investing activities decreased$14.3 million to $12.4 million in 2025 compared to 2024. This decrease was primarily due to decreased investment in new restaurant openings and restaurant technology in 2025. We opened two and 10 company-owned restaurants in 2025 and 2024, respectively.
Previous wording
Net cash provided by financing activities was $17.3 million in 2024, compared to $25.8 million in 2023. The decrease from 2023 was primarily due to a reduction in net borrowings to fund capital spending in 2024.
Current wording
Net cash provided by financing activities was $5.2 million in 2025, compared to $17.3 million in 2024. The decrease from 2024 was primarily due to a reduction in net borrowings in 2025.
Previous wording
Our long-term obligations consist primarily of certain lease and other contractual commitments related to our operations and payment of our outstanding debt obligations. In addition, new store development will require capital each year which is expected to be funded by currently available cash and cash equivalents, cash flows from operations and our revolving credit facility.
Current wording
Our long-term obligations consist primarily of certain lease and other contractual commitments related to our operations and payment of our outstanding debt obligations. In addition, new store development will require capital in each year that we plan to open new restaurants which is expected to be funded by then available cash and cash equivalents, cash flows from operations and our revolving credit facility.
Previous wording
Our capital expenditure requirements are primarily dependent upon the pace of our real estate development program and resulting new restaurant openings, costs for maintenance and remodeling of our existing restaurants, as well as information technology expenses and other general corporate capital expenditures.
Current wording
Our capital expenditure requirements are primarily dependent upon the pace of our real estate development program and resulting new restaurant openings, costs for maintenance and remodeling of our existing restaurants, as well as information technology expenses and other general corporate capital expenditures. We currently do not plan to open any company-owned restaurants in 2026.
Previous wording
Our total capital expenditures for 2024 were $28.8 million, which includes amounts for restaurants that will be opening in 2025. We expect our 2025 capital expenditures to be in the range of $11.0 million to $13.0 million. Our capital expenditures in 2025 are expected to be primarily related to our reinvestment in existing restaurants, the opening of two new restaurants and technology improvements.
Current wording
Our total capital expenditures for 2025 were $12.4 million primarily related to two new company-owned restaurants, reinvestment in existing restaurants and technology improvements. We expect our 2026 capital expenditures to be in the range of $9.5 million to $10.5 million. Our capital expenditures in 2026 are expected to be primarily related to our reinvestment in existing restaurants.
Previous wording
Our contractual obligations consist of lease obligations, purchase obligations, long-term debt and other liabilities. See Note 4 Long-Term Debt and Note 12 Leases to our consolidated financial statements for further discussion. We are obligated under non-cancelable leases for our restaurants, administrative offices and equipment. In addition to those lease obligations, we have legally binding minimum lease payments for leases signed but not yet commenced amounting to $1.1 million as of December 31, 2024. We enter into various purchase obligations in the ordinary course of business. As of December 31, 2024, our binding purchase obligations are approximately$49.4 million, which includes $29.1 million to be incurred within the next 12 months. These amounts relate to volume commitments for beverage and food products, as well as binding commitments for the construction of new restaurants. Our other liabilities of $2.2 million as of December 31, 2024 includes our commitment under our non-qualified deferred compensation plan and severance.
Current wording
Our contractual obligations consist of lease obligations, purchase obligations, long-term debt and other liabilities. See Note 4 Long-Term Debt and Note 12 Leases to our consolidated financial statements for further discussion. We are obligated under non-cancelable leases for our restaurants, administrative offices and equipment. In addition to those lease obligations, we have legally binding minimum lease payments for lease renewals signed but not yet commenced amounting to $0.5 million as of December 30, 2025. We enter into various purchase obligations in the ordinary course of business. As of December 30, 2025, our binding purchase obligations are approximately $57.1 million, which includes $40.5 million to beincurred within the next 12 months. These amounts relate to volume commitments for beverage and food products. Our other liabilities of$1.0 million as of December 30, 2025 includes our commitment under our non-qualified deferred compensation plan and severance.
Previous wording
We review long-lived assets, such as property and equipment, right of use assets and intangibles, subject to amortization, for impairment when events or circumstances indicate the carrying value of the assets may not be recoverable. In determining the recoverability of the asset value, an analysis is performed at the individual restaurant level and primarily includes an assessment of historical cash flows and other relevant factors and circumstances. The other factors and circumstances include changes in the economic environment, changes in the manner in which assets are used, unfavorable changes in legal factors or business climate, incurring excess costs in construction of the asset, overall restaurant operating performance and projections for future performance. These estimates result in a wide range of variability on a year to year basis due to the nature of the criteria. Restaurant-level cash flow less than our internal threshold over the previous 12 periods is considered an indicator of potential impairment. In such situations, we evaluate future undiscounted cash flow projections in conjunction with qualitative factors and future operating plans. Our impairment assessment process requires the use of estimates and assumptions regarding the future undiscounted cash flows and operating outcomes, which are based upon a significant degree of management’s judgment.
Current wording
We review long-lived assets, such as property and equipment, right of use assets and intangibles, subject to amortization, for impairment when events or circumstances indicate the carrying value of the assets may not be recoverable. In determining the recoverability of the asset value, an analysis is performed at the individual restaurant level and primarily includes an assessment of historical cash flows and other relevant factors and circumstances. The other factors and circumstances include changes in the economic environment, changes in the manner in which assets are used, unfavorable changes in legal factors or business climate, incurring excess costs in construction of the asset, early lease terminations and closures, overall restaurant operating performance and projections for future performance. These estimates result in a wide range of variability on a year to year basis due to the nature of the criteria. Restaurant-level cash flow less than our internal threshold over the previous 12 periods is considered an indicator of potential impairment. In such situations, we evaluate future undiscounted cash flow projections in conjunction with qualitative factors and future operating plans. Our impairment assessment process requires the use of estimates and assumptions regarding the future undiscounted cash flows and operating outcomes, which are based upon a significant degree of management’s judgment.