Simple bowls of noodles and sauces have led a fast-casual restaurant chain to become a beloved brand for decades and many post-mall shopping families.
Now, however, the chain joins a growing list of competitors facing operational and financial pressures in an increasingly difficult market.
Founded in 1995 in Denver, Colorado, Noodles & Company quickly gained popularity for its noodle dishes. The company’s early success allowed it to expand nationally and go public in 2013.
However, even with a strong start, the brand has not been immune to the lingering effects of the Covid pandemic, which has helped reduce consumer spending and increase operating costs.
In response, Noodles & Company revealed in September 2025 that it was exploring “strategic alternatives” to maximize shareholder value, including refinancing, refranchising or possibly selling the business.
“We believe now is the right time to consider strategic options for our brand that could allow us to more effectively maximize value for our shareholders,” Noodles & Company CEO Joe Christina said in a press release.
Adding to its mounting challenges, the company has received at least two delisting warnings from Nasdaq, first in December 2024 and again in June 2025, after failing to maintain its minimum share price of $1 for more than 30 consecutive trading days.
Now Noodles & Company has revealed a major update on the future of its business.
Following a “thorough” review of the business, Noodles & Company ( NDLS ) revealed plans to close 30 to 35 restaurants in 2026, continuing a trend of closures that has reduced its national footprint in recent years.
At the end of 2025, the chain operated 423 restaurants, comprising 340 company-owned locations and 83 franchise locations, according to its preliminary results for the fourth quarter of 2025.
“We continue to close underperforming restaurants and benefit from shifting approximately one-third of their sales to nearby profitable locations,” Joe Christina, CEO of Noodles & Company, said in the company’s third quarter 2025 earnings results. “All of this is driving margin and adjusted EBITDA improvement, guest excitement and strengthening our relevance.”
This strategy seems to be working. Noodles & Company reported a 32.7% increase in adjusted EBITDA to $6.5 million in the third quarter of 2025, up from $4.9 million a year earlier.
Meanwhile, its shares were up 14.6 percent at the close on Jan. 12, representing a gain of more than 21 percent year-to-date, according to Yahoo Finance.
Noodles & Company announces more restaurant closings for 2026.Shutterstock” loading=”lazy” height=”540″ width=”960″ class=”yf-lglytj loader”/>
Noodles & Company announces more restaurant closings for 2026.Shutterstock
To reignite growth, Noodles & Company relied on menu innovation and value-focused initiatives. In early 2025, the chain revamped its menu, introducing new dishes and boosting fan favorites while ramping up national marketing efforts.
More closed restaurants:
The changes initially resonated well with consumers. In the first quarter of 2025, total revenue rose 2% year-over-year, with same-store sales up 4.4%.
However, by the second quarter of the same fiscal year, revenue growth had slowed to 0.7% as changing consumer habits and a value-conscious market amid economic uncertainty took hold.
“Our sales and traffic moderated after the initial successful launch of our new menu due to the highly value-conscious climate as well as slower guest adoption of upgrades made to some of our historic menu items,” former Noodles & Company CEO Drew Madsen said in a press release. “We have moved decisively to address these factors, particularly around guest value perception.”
Noodles & Company responded by launching Delicious Duos in July 2025, following a survey to gather consumer feedback. That effort helped drive comparable sales growth of 4.5% in August, and through the third quarter of 2025, comparable sales rose 4% systemwide, despite a 0.5% decline in total revenue.
The closings have become an ongoing reality for Noodles & Company as it works to strengthen its bottom line.
Noodles & Company’s struggles reflect broader trends in the restaurant industry, where rising costs and changing consumer habits have led to thousands of closures in the sector. Even old chains suffer the same fate.
Inflation played a key role in restaurant closings. Food away from home prices rose 3.7% in the 12 months ending in September 2025, according to recent data from the US Bureau of Labor Statistics.
Additionally, over the past five years, food and labor costs for the average restaurant have each increased by about 35 percent, according to the National Restaurant Association. To offset these increases, menu prices rose an average of 31% between February 2020 and April 2025, based on data from the US Bureau of Labor Statistics.
As prices rise, customer traffic fell 1 percent in the food service industry during the quarter ending June 2025, according to Circana.
“This presents a significant challenge for restaurants as home-cooked meals directly displace demand for dine-in establishments, which translates into reduced revenue and decreases in customer traffic as demand shifts to grocery stores,” said Coresight Research analyst Sujeet Naik.
To combat rising costs and dampen demand, many restaurants are turning to menu innovation, modernization and redefined value propositions.
“In response to the shrinking food dollar and empowered customers, restaurants are turning to innovative business and operating models to capture greater market share,” KPMG restaurant segment leader Paul Fultz and consumer markets strategy leader Joel Rampoldt said in a study.
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This story was originally published by TheStreet on January 13, 2026, where it first appeared in the Restaurants section. Add TheStreet as a favorite source by clicking here.
