And then we get to the initiatives. So the initiatives, absent the initiatives, we would be — the assumption would be relatively flat in Q3, Q4. And I’ll let Drew speak to what we’re expecting from the initiatives in the back half of the year.
Drew Madsen: Yes. So to start with on the initiatives, I think it would be helpful to provide maybe how we view the business and how we’re approaching it strategically and operationally which is different. We focused a lot on AUV in the past, and that is certainly a relevant measure, but our fundamental opportunity is to drive traffic. And we have tried to align every priority — all of our priorities with an improved line of sight towards traffic growth going forward. It’s not immediate, but it is much more calibrated to driving traffic growth. And let me give you an example. On operations, there’s obviously a lot of things we can measure and things that we can improve. Staffing is always going to be important. Training is always going to be important.
Food safety will always be important. But in the past, I would say, we’ve looked at making incremental improvement across a wide variety of important metrics. And what we’re doing this year is trying to make penetrating improvement on the handful of items that make the most difference to traffic. So we actually took all of our loyalty data and calibrated that against traffic to find out what moved the needle the most on traffic, and it’s food taste and accuracy for us. And then we set measures of what success looked like on those two things that were more than the improvement we typically planned on. And they were levels of improvement that we think guests will notice — guests will react to when their experience is better. But our frequency is only about once a quarter, 1.5 times a quarter.
So it’s going to take a few visits of guests really enjoying Noodles and ultimately changing their behavior and coming more often. So it’s not an immediate thing there. But it is a much more disciplined focus on traffic. Same thing on our digital ecosystem, which we think is one of the best in fast-casual, but it can be better. And we are more focused on measuring things that drive traffic by getting more people into the top of the funnel, improving our conversion all the way through and then being more personalized and more efficient in how we market to our loyalty base because we’ve now got a platform, a customer data platform that gives us the information to do that. So again, it won’t happen overnight, but we’re aligning everyone and measuring everything against driving traffic.
Jake Bartlett: Great. Drew — and I had maybe been overly focused on the changes in the menu, but would you say that the opportunity here is as big or bigger on the operational side? Or how would you kind of frame what’s the biggest opportunity here for Noodles, whether it’s operations or the…
Drew Madsen: Yes. I would say in the near term, the bigger opportunity is improving the guest experience day-to-day, unit-to-unit across the country, most particularly in the bottom quartile, where we’ve got the biggest opportunity to make fast improvement. But getting into 2025 and beyond, I would say the bigger opportunity is changing how people think about our menu and from going from somewhat expected to more contemporary comfort, if you will, with dishes that are still broadly appealing, but not that you can get everywhere. And I think that’s going to be a bigger driver starting in 2020 — early 2025 and beyond.
Jake Bartlett: Great. And then — and last question…
Drew Madsen: Sorry, just one last comment on that. This is a really big menu change we’re focused on. And I’ve mentioned some of it in my opening comments, but we’re looking at menu architecture that — by that, I mean the menu way out, it will be easier for our guests to navigate. We’re looking at meaningful improvements to existing dish recipes. We’re looking at adding new dishes that address need states that we aren’t real competitive in at the moment. We’re looking at some name changes. And it’s probably going to touch roughly half the menu. And I come from the school of measure twice, cut once, and we want to make sure that we get it right before we expand it broadly. And that’s why we’re talking about end of 2024, early 2025. But I think it will be a big — will have a big impact when it’s in.
Jake Bartlett: Great. That makes a lot of sense to me. My last question is on development and building on Todd’s question, but you’re lowering the guidance a little bit for the fourth quarter, at least we’re having a slower — slowdown in ’24. It seems to me like that would kind of beginning of continued slowdown, meaning you’re probably not — is it right to assume you’re not signing new leases for what would be opening in ’25 and ’26? I’m just trying to get a realistic sense as to when all goes right, is this a deceleration and then a reacceleration that really takes the number many years to kind of get back to a situation where you’re actually at a point where you can reaccelerate growth? It’s that just that the right way to kind of level said expectations?
Drew Madsen: Sure. Yes, when we think about the new unit growth opportunity over many years, we think it’s significant given the need state we’re addressing, the price point that we offer, the breadth of appeal of pasta and noodles. The fact that we’re not in big states like Texas and Florida, I mean we think the growth over time is meaningful. But our traffic has dropped a fair amount in the last year — 18 months and that’s had a corresponding impact on our unit economics. And until we get traffic up and get our margin up and also develop a somewhat lower cost prototype, we’re in the $1.1 million, $1.2 million investment range. And we really ought to be more in the $1 million range. Those 2 things together will really widen the bull’s-eye for where we could go with confidence and open new units.
