Beloved pasta restaurant and Olive Garden rival at risk of closing as chain reveals exact date it must turn it around
A competitor of Olive Garden that has lost patronage has been given a deadline to either attract new business or close.
Over the last two years, Noodles & Company, which has more than 450 locations, has had financial difficulties.
The 26-state fast-food pasta franchise recorded a net loss of $6.8 million and a net income of $0.7 million for the third quarter of 2023.
However, efforts to reduce losses and boost revenue in 2024 were unsuccessful.
Noodles & Company has now been set specific objectives and a deadline to meet them or face permanent closure.
The company faces the possibility of being delisted from the Nasdaq Global Select Market after its stock price fell to less than $1 for 30 consecutive days.
read more on closures
Walgreens adds store to planned closures list after confirming 1.2k will shut
Big Lots, CVS, & Walgreens among national chains with mass closures in 2024
The restaurant company needs to figure out a means to turn a profit of at least $1 per share by June 23.
In an attempt to save the chain from bankruptcy, Noodles & Company said it “intends to monitor closely the closing bid price of its common stock and to consider all of the options for regaining compliance with Nasdaq’s Listing Rule 5450(a)(1) including by proposing a reverse stock split for stockholder approval, if necessary.”
The restaurant chain is optimistic that it will be able to improve its situation by its June deadline, despite its difficulties.
In a last-ditch effort to draw clients, it intends to introduce additional menu items and the Noodles app.
Drew Madsen, the chain’s CEO, stated that the company faced a “challenging” market in Q3 after revealing a 3.3% decline in sales.
Madsen commented: “In the third quarter, we continued to face a challenging consumer environment with a significant level of industry-wide promotional and discount activity coupled with a marked and unexpected decline in our third-party delivery sales.”
The chain now intends to implement a multifaceted plan to increase sales in order to resolve the grave scenario.
This involves “fortifying our financial position by reducing capital expenditures, slowing new unit growth, researching lower cost restaurant prototypes and capturing increased efficiencies across the business,” Madsen stated.
“We believe that focusing on these priorities will allow the brand to resonate with our guests and lead to sustainable long-term, top-line momentum and profitable growth.”
This year, between 15 and 20 stores will be eliminated as part of this “fortification” of its financial condition.
According to the CEO of the chain, closing “underperforming” restaurants will allow the company to concentrate on those with “the most growth potential.”
Additionally, it would “provide an increase in company earnings and cash flow post closure,” Madsen said.
55 outlets were already eliminated from Noodles & Company’s operational footprint in 2017.
With digital sales making up 55% of total sales in Q3, it is believed that the launch of the chain’s app will also be beneficial in increasing revenue.
However, there are other restaurant chains that are having difficulty keeping up with the latest eating trends besides Noodles & Company.
Read More on The US Sun
Dad saves ‘kidnapped’ daughter, 14, in Taken-style hunt as ‘rapist’ arrested
Pregnant Jinger Duggar reveals growing baby bump in tight silk dress
As it closes 90 outlets, an insolvent restaurant business has confirmed three further closures in the same state.
Rubio’s Coastal Grill, meanwhile, has released a “painful” update regarding their operations.
Note: Every piece of content is rigorously reviewed by our team of experienced writers and editors to ensure its accuracy. Our writers use credible sources and adhere to strict fact-checking protocols to verify all claims and data before publication. If an error is identified, we promptly correct it and strive for transparency in all updates, feel free to reach out to us via email. We appreciate your trust and support!