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Chief Financial Officer Mike Hynes did not sugarcoat the situation during an earnings call.
“We’re very pleased with the results from closing underperforming restaurants,”
That single line tells the real story. These locations were losing so much money that closing them was considered a win.
Even worse, the customer base largely vanished with them. Company data shows only about 30 percent of guests from closed restaurants shifted to nearby Noodles locations. The remaining 70 percent simply disappeared, choosing competitors or cooking at home instead.
This collapse did not happen overnight
Noodles & Company’s troubles stretch back years.
The Colorado based chain has been trimming failing restaurants since 2017, when it shut down 55 locations in just six months. That represented roughly 10 percent of its footprint at the time.
Chief Executive Officer Joe Christina has repeatedly framed closures as strategic decisions rather than signs of distress.
“These closures are never easy, but they are the right ones for the long-term health of the brand,”
“By tightening our portfolio and focusing on high-performing restaurants and markets, we can strengthen operations, elevate the guest experience, and focus on innovation that drives continued growth in sales and margin.”
What leadership does not highlight is the shrinking runway. Noodles ended 2024 with 371 company owned restaurants and 92 franchised units. By the end of 2025, that number is expected to drop to roughly 340 company locations.
Plans are already in place to close another 12 to 17 restaurants in 2026.
At some point, there are simply no more stores left to cut.
Menu changes and marketing cannot fix a broken economy
In a bid to reverse its fortunes, Noodles & Company has thrown nearly everything at the wall.
The chain rolled out a dramatically redesigned menu, replacing about 70 percent of its offerings. It introduced value focused “Delicious Duos” starting at $9.95. Management even pointed to an 8 percent same store sales increase in October as a sign of momentum.
But modest gains at surviving locations do not erase the reality of dozens of shuttered restaurants and millions of dollars written off.
The company’s third quarter 2025 report showed $5.3 million in restaurant impairment charges tied directly to closures. That money is gone for good.
Meanwhile, Noodles still carries $108.3 million in debt and ended the second quarter with just $2.3 million in cash on hand.
A nationwide restaurant reckoning
Noodles & Company is far from alone.
Across the country, chains that once catered to middle class families are collapsing at alarming rates. TGI Fridays entered Chapter 11 after closing more than 100 locations. Red Lobster shut down 131 restaurants before filing for bankruptcy. Denny’s closed 88 stores in 2024 and plans to shutter up to 150 total. Applebee’s has been closing more locations than it opens for nine consecutive years.
The pattern is unmistakable.
Food and labor costs for restaurants have surged roughly 35 percent over the past five years. In 2024 alone, 87 percent of operators reported higher food prices and 88 percent faced rising labor costs.
At the same time, customers are pulling back. Bank of America data shows quick service restaurant traffic fell 3.6 percent in December 2024. The National Restaurant Association reports that three quarters of restaurant traffic now comes from takeout rather than dine in visits.
Fast casual brands sit in the most dangerous spot of all. They are more expensive than fast food but offer none of the experience of full service dining.
As inflation drains household budgets, families are either trading down or saving their money for rare sit down meals. Chains like Noodles & Company are caught in between, with nowhere left to run.
The company’s slogan may be “We Know Noodles,” but consumers know something else entirely. In Biden’s economy, eating out is no longer affordable for millions of Americans.
