Although Noodles & Company recently reported mediocre second-quarter earnings, the Bloomfield, Colo.-based fast-casual operator remains confident and poised for steady growth, according to chairman and chief executive Kevin Reddy.
Following a strong start to the year, the 410-unit chain saw profits fall 7.5 percent and systemwide same-store sales dip 0.7 percent during the quarter ended July 1. However, the company opened 16 new restaurants during the quarter, and still has its sights set on reaching 2,500 units over the next 15 to 20 years. The brand, known for its customizable pasta dishes, was recently named the seventh fastest-growing restaurant chain in NRN’s annual Top 100 report.
Reddy, who says he is as optimistic as ever concerning the company’s future, recently spoke to Nation’s Restaurant News about new fall menu items, what he looks for when opening in new markets and the excitement surrounding the brand’s recently launched catering platform.
What are you planning for Noodles & Company this fall?
Our menu is always one of the more exciting things at Noodles & Company. We’ve got some fun limited-time offers coming up in the fall. We have a Fig in the Pig Flatbread, which is our antibiotic-free pork with a fig drizzle, and we are also going to offer a Buffalo Chicken Mac & Cheese that features our Parmesan-encrusted chicken and a Buffalo sauce.
You’re also targeting quite a bit of growth.
We believe that over the long term we can reach penetration levels of 2,500 [units] in the United States, and we are well on that path. The real estate remains robust. We are clearly optimistic about the long term, which is why we continue to invest capital in new growth, while you see a lot of restaurants still being pretty cautious.
We just opened in San Francisco this weekend and are starting to build out some early entry markets down in Orlando, [Fla.], and we just got into Houston. We’re constantly adding a couple new markets every year. We’ve got some strong franchisees in the Northeast that just started to open new restaurants in the past year as well.
What do you look for when entering a new market?
We are looking for strong middle-income neighborhoods with a fair amount of density. All of our trading areas have core criteria around demographics, and then we combine it with a pretty rigorous site checklist where we’re looking at physical plant, visibility, ingress, parking, etc. We are very disciplined on what we are willing to accept in that area because it’s an expensive, long-term decision.
How does your service style differ from other fast-casual players?
Well, everything is a little nicer here. Our dining rooms are comfortable but not stuffy. You can have a complete, balanced meal delivered to your table on china by a server that wants to make sure all your needs are taken care of. We deliver, I think, from a hospitality standpoint, an experience closer to casual dining with the speed and price point of fast casual.
How is the new catering program performing?
Because our menu is diverse, we’ve got this great platform where you can come in with larger orders for groups from 20 to 300 people [priced around $12 per person] and make everyone happy. We’ve done some weddings and some great Christmas parties and banquets, and we are seeing some really nice early success. We just completed the training on it and all of our general managers are pretty fired up about it.
