Noodles & Company has entered into a support agreement with activist investor Hoak & Co. and related companies as it continues to struggle with sales and traffic.
As part of the agreement, the Broomfield, Co.-based chain has appointed Hoak investor and vice president Britain Peakes to its board of directors, effective June 10, and Hoak has agreed to maintain its investment at around 9.48% of outstanding shares and support the current executive board.
In a press release, Noodles & Company said Peakes’ role at Hoak & Co., includes sourcing, due diligence, transaction negotiation and execution, portfolio management, and financial analysis across real estate, private equity, and public equity sectors.
“We have a productive and collegial relationship with Hoak & Co., and we share a commitment to building and increasing shareholder value,” Noodles & Company chairman of the board Jeff Jones said in a statement.
Peakes said she was looking forward to her new role.
“I have long admired the Company’s commitment to quality, innovation, and guest satisfaction,” she said. “As a director, I look forward to contributing to the Company’s strategic growth initiatives in support of its mission to deliver exceptional dining experiences.”
Noodles & Company has been struggling since customers responded badly to a price hike in February of 2023 which led to the departure of then-CEO Dave Boennighausen and the eventual appointment of Panera veteran Drew Madsen.
The new CEO has since implemented a plan to turn the company around, including revamping the menu, implementing tech updates, and raising standards at underperforming restaurants within the 470-unit chain.
During the chain’s most recent earnings call, for the quarter ended April 2, when same-store sales were down by 5.4%, revenue was down by 3.7%, margins fell by 3.4%, and the company booked a net loss of $6.1 million, Madsen warned that it would take time for the plan to take effect, with a full menu rollout planned for 2025.
Contact Bret Thorn at [email protected]
