American restaurant chains have faced significant challenges over the past two years, and now another prominent name is implementing further closures. Noodles & Company, the Colorado-based fast-casual chain known for its unique fusion of Italian pasta dishes and Asian-inspired noodle bowls, has revealed plans to close an additional 30 to 35 restaurants in 2026.
Strategic Downsizing Continues
This announcement follows a more aggressive closure programme than initially planned last year. The company informed Wall Street this month that it ended 2025 with 340 company-owned restaurants and 83 franchise locations, having closed 42 restaurants during that year - double the number originally projected.
If the 2026 closures proceed as planned, Noodles & Company will have reduced its total restaurant count by more than 100 establishments since early 2024, representing a contraction of over 18 percent in just two years.
Deliberate Restructuring Strategy
Company executives describe these closures as a deliberate strategic move designed to preserve the strongest performing restaurants while ceasing operations at underperforming locations that were draining financial resources.
This approach appears to be yielding positive results at remaining outlets, with comparable sales increasing by more than 7 percent in the most recent quarter. The chain attributes this improvement largely to its new value menu, Delicious Duos, launched in July, which offers a small entrée with a side starting at $9.95.
Menu Innovation and Financial Challenges
Noodles & Company has also focused on menu updates to drive customer interest, including introducing a new chile-garlic ramen dish late last year priced at $8.95. The chain's distinctive concept combines Italian-style pasta dishes like mac and cheese and spaghetti with Asian-inspired offerings such as ramen and stir-fried noodles under one roof.
Despite improving sales at remaining locations, the company faces substantial financial difficulties. Its share price has plummeted 98 percent since its initial public offering in 2014, with the company's current valuation standing below $33 million.
Listing Threats and Activist Pressure
The stock price decline has created persistent listing concerns. Noodles & Company narrowly avoided delisting from the Nasdaq in 2025 when its shares traded below $1 for several months, and the stock has remained under that threshold for the past six months, renewing delisting threats.
Adding to the pressure, an activist investor holding just over 6 percent of the company has been advocating for the sale of up to 200 restaurants, arguing that a significantly smaller operation would strengthen the chain.
Exploring Strategic Options
In response to these challenges, Noodles & Company hired an investment bank last autumn to explore various strategic alternatives, including a potential sale of the entire company. Executives have also proposed a reverse stock split - a technical manoeuvre that combines multiple shares into one to artificially elevate the share price without altering the company's fundamental value.
Shareholders are scheduled to vote on this reverse stock split proposal on February 4.
Broader Industry Context
Noodles & Company's struggles reflect wider difficulties within the American restaurant sector. At least 22 restaurant chains filed for bankruptcy in 2025 - the highest number since 2020 according to industry data.
Prominent examples include Red Lobster, which entered bankruptcy proceedings in May 2025 before emerging as a continuing entity after closing nearly 100 restaurants. Other chains like BurgerFi, Buca di Beppo, and TGI Fridays have also implemented restaurant closures and filed for bankruptcy protection.
Industry-Wide Pressures
Industry analysts attribute these widespread challenges to persistent inflationary pressures, rising wage costs, and consumers becoming more cautious about discretionary spending on dining out.
Joe Christina, CEO and President of Noodles & Company, emphasised the strategic nature of these decisions during the company's recent earnings presentation for the October to December quarter: "Decisions like this are made thoughtfully and with a long-term view of the business. Our fourth quarter results reinforce that when we concentrate on restaurants with the strongest opportunity to perform, Noodles can drive meaningful top-line growth."
Christina added that the recent performance "gives us added confidence" for 2026, suggesting the company believes its strategic downsizing will ultimately strengthen its market position despite the significant reduction in physical locations.
