Noodles eyes growth as chain adapts to post-COVID dining trends

BROOMFIELD — Along the Front Range of Colorado, it can seem like every other strip mall is home to a Noodles & Co. (Nasdaq: NDLS) restaurant.

But that’s not the case in many parts of the country, where new vice president of franchise sales John Ramsey plans to focus much of his expansion efforts as Noodles seeks to continue its positive momentum in the post-COVID-19 fast-casual dining environment.

“Noodles is in a very envious place in the industry right now,” said Ramsey, who joined the Broomfield-based company late last year.

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Of Noodles’ more than 450 restaurants, 85% are company-owned and operated and highly concentrated in the firm’s mature markets such as the Boulder Valley and Northern Colorado. 

“Stores in those markets are self-sustaining, they run well, they’re profitable and easy to support and service,” said Ramsey, an architect by trade who began working in franchising after years overseeing restaurant development and construction.

But, he said, “there are a whole bunch of markets where we have no presence whatsoever, so the opportunity for growth is very high.”

It’s these markets — such as Dallas; Houston; Atlanta; Tampa; Oklahoma City; New Orleans; Albuquerque, New Mexico; and Fort Myers, Florida — where Ramsey will seek to recruit new franchisees.

“We have a nice balance in place in terms of the economics,” Ramsey said. At Noodles, food and labor costs — the chain’s main expenses — are fairly low compared with the industry as a whole, which makes the brand attractive to franchise operators. 

In terms of who Ramsey’s looking to partner with in a franchisee, he said he looks for someone who “really wants to build something — to build a company, an infrastructure, hire people, grow, provide opportunities, leave a legacy.”

Ideal franchisees are familiar with the restaurant businesses and have development and construction experience along with a strong relationship with a bank, he said. 

Noodles, with its existing inherent characteristics coupled with some new innovations, has been uniquely situated to withstand the pressures of the pandemic and is poised for success as customer habits formed over the past year become ingrained long term, according to Ramsey. 

“The lunch business changed and shifted” as more employees work from home, he said. But unlike other restaurant concepts such sub sandwiches or burgers, Noodles can make up for lower lunchtime sales in the evenings. 

“A dinner meal is a different experience,” Ramsey said. “I want something hot and something fresh. And when you think of what Noodles is — pasta — it’s very much a dinner type of meal.”

And unlike certain dinner-centric chains, Noodles’ offerings travel well, so it’s easier to replicate the in-restaurant dining experience. 

Additionally, Noodles has a user-friendly mobile app and a menu that’s highly customizable with a system of checks and balances in place to ensure order accuracy.

“If I can do the whole ordering process without interacting with a person, it makes me feel better and safer — not to mention the convenience of it,” Ramsey said. 

Certain recently introduced menu items, cauliflower gnocchi for example, are sold to-go in a new two-part container to allow diners to apply sauce themselves to avoid sogginess in transport.

“We believe that off-premises will continue to be a strong, viable and profitable channel,” Ramsey said. “… As we roll out new items, we’re thinking about what the experience is going to be when it gets to its final destination.”

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