Good morning, and welcome to today’s Noodles & Company Fourth Quarter 2016 Earnings Conference Call. All participants are now in a listen-only mode. After the presenters’ remarks, there will be a question and answer session. As a reminder, this call is being recorded. I would now introduce Noodles & Company’s Vice President of Finance, Sue Daggett. Please go ahead.

Thank you, and good morning everyone. Welcome to our fourth quarter 2016 earnings call. Here with me this morning is Dave Boennighausen, our CFO and Interim Chief Executive Officer. Let me start by going over a few regulatory matters. I'd like to note that during our opening remarks and in response to your questions, we may make forward-looking statements regarding future events or the future financial performance of the company. Any such items, including our guidance about our anticipated results in 2017 and details relating to our future performance, should be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are only projections and actual events or results could differ materially from those projections due to a number of risks and uncertainties. The Safe Harbor statement in yesterday afternoon's news release and the cautionary statement in the company's most recent Form 10-K and subsequent filings with the SEC are considered a part of this conference call, including the portions of each that set forth the risks and uncertainties related to the company's forward-looking statements. I refer you to the documents the company files from time-to-time with the Securities and Exchange Commission, specifically the company's Annual Report on Form 10-K for its 2015 fiscal year and subsequent filings we have made. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. We anticipate the annual report on Form 10-K for 2016 fiscal year will be filed later this week. Now, I would like to turn it over to Dave.

Thank you, Sue, and good morning everyone. Yesterday afternoon, we reported Q4 2016 financial results including an adjusted net loss of $1.1 million and adjusted EBITDA of $6.8 million. As pre-released in early February, we also reported total revenue of $129.4 million, a 10.5% increase over the prior year. Comparable sales for the quarter decreased 1.3% system-wide which included a 1.8% decrease at company-owned restaurants, partially offset by a 2% increase at franchise locations. In conjunction with our pre-release, we also held a call discussing our strategic initiatives and financing activities. This morning I would like to give you an update on those activities as well as provide more texture on how we see the business progressing. Noodles remains a differentiated concept in an increasingly crowded marketplace. With our world kitchen positioning, we offer globally inspire flavors from near to far, cook to order using high-quality fresh ingredients prep throughout the day, we also have a strong core of incredible team members and hundreds of profitable locations. That said, as we have discussed, there have been three strategic areas that we have been focusing on to improve our performance and to increase shareholder value. First, simplifying our operations to improve execution and to increase labor productivity; second, regaining our culinary prowess through investing in our core menu; and third addressing underperforming restaurants from recent classes that have negatively impacted the company’s performance, particularly those opened in the last three years in new markets. We have made significant progress in all these areas which I will update you on today’s call. I would like to start with the improvements that we are seeing in our operational execution. During the past several months, we have taken several actions from streamlining our menu, through introducing new cooking procedures that help our team members…

Absolutely. [Operator Instructions] And our first question comes from Gregory Francfort of Bank of America. Your line is now open.

Hey guys, just the first one, can you talk a little bit about comps at the underperforming restaurants versus the existing base? And maybe if you would remove those stores last year would comps have been meaningfully better?

Sure, Greg. So these restaurants were slightly underperforming where the balance of the company was from a same-store sales perspective to the neighborhood of about 20 to 30 basis points.

Got it. And then just, as you thought about the stores to be closed, how did you assess which ones would be closed or not? Was it stores that were negative EBITDAR, negative EBITDA, does it fully wipe out the negative cash flow stores? Or are there anymore remaining?

Yes, certainly, the number of restaurants that we’ve ultimately targeted is approximately that 55. How we looked at it, exactly as you mentioned, Greg, in terms of really focusing on those restaurants that were losing the most from a cash flow perspective, certainly taking into consideration what the rent profile was. It wasn’t entirely all the characteristics from the criteria we looked at, certainly also looked at momentum, looked at where we saw portrait area it was and the potential of those sites, but ultimately the cash flow and the human resource distraction was also an enormous component. Many of these restaurants tended to be in smaller markets that were newer markets that have been a significant distraction for a pretty small percentage of the business.

Got it. And then maybe, can you just about the menu cleanup? I think you’d removed sandwiches and I don’t know, maybe what else you’ve done and I guess, sort of what are you seeing from a guest perspective just in response to maybe some of the menu item cleanup.

Sure, so we – a lot of these were actually effected in October of last year and so what we did in that timeframe was removed the sandwiches line-up, the buffalos line-up, as well as we streamlined our catering offering. All of these had pretty significant benefits on our execution at the operational level, speed of service. Just our team members having a much better experience in terms of executing the concept. From the guest perspective, also very, very minimal if any resistance that we have seen from these changes. These were items that were relatively low velocity as you can imagine. During this most recent LTO, we did removed two underperforming dishes to make room for the Adobo as well as the gluten free Thai Green Curry. That said, we are closely monitoring if there is one dish that we might actually be bringing back in future months in a reformulated version to improve that profile. But the guest I think, overall, we’ve had plenty of research in our own belief that it’s been a little bit overwhelming in terms of the number of items that we’ve had on the menu. So, the guest feedback has been generally positive.

Great, thank you very much.

Thank you. And our next question comes from John Glass of Morgan Stanley. Your line is now open.

Thanks, good morning. Dave, just first could you just remind us, what the average unit volume of the closed stores were? And what the resulting average unit volume of the system will be excluding the 55 closed?

Yes, so, John, the average unit volumes for the restaurants that are closed have been approximately $700,000. From an AUV perspective, as long it depends on what the timing has been if we’re able to effect the additional closures that we’ve targeted, but I believe that is about a $75,000 to $100,000 pickup in overall company average unit volumes when you remove all those targeted restaurants.

Great, and then, with respect to the refranchising, how many do you – how are you thinking about that? What’s the target number of stores you think might be available to refranchise?

That’s a great question, John. So there is no specific number that we’ve set. And we still do believe that in the near future, we will still remain primarily under company ownership. As a reminder, where we sit today is about 86%. So we will certainly move a little bit more towards franchise penetration, but not meaningfully to where you would see those numbers slip or anything along those lines. Most of the efforts that were focused on for these markets are ones that we believe have absolutely tremendous potential. They are going to flourish under franchise ownership that can be laser-focused on their execution and we do expect on that the process is going to be pretty lengthy in terms of when the re-franchising actually effects, we would expect it’s probably the last half of 2017, as well as through 2018, just to make sure that we have the absolute right partner and so we feel very confident that these are markets that are going to flourish under franchise ownership. The number itself will have more texture as we get farther along in the process. And you can also see, as we said, we engaged the Cypress Group. There will be more information to come soon on their efforts.

Great, and then just lastly for me, can you bridge from the EBITDA guidance you provided down to on cash flow or free cash number, taking into account I guess, the charges in CapEx and do you think the financing that you have will leave you with a net – how big a net positive cash position to sort of sensing with the underlying cash flow health of the business is, with all these moving parts?

Certainly, so, what we do see coming out of this is, when all of the activities are done, the cash flow profile of this business will be incredibly strong. Given the much lower unit growth rate, given the capital infusion that we will have, and the ability to remove the drag that we have had from those underperforming restaurants, we anticipate that we will be significantly free cash flow positive as we go further on to the year. There is some challenges in terms of guidance which we will have more texture on in future quarters, just we don’t know what that upcoming capital raise could be, so that could meaningfully change things. We did disclose a data breach assessment that we took a charge for, the timing of that and what the magnitude of, it could also change and that could be very late this year and even into 2018. So, we don’t have specific timing on the cash flow. One other final moving piece would be lease extinguishments. As we said, we expect $24 million to $29 million of cost associated with that. The timing of that is really, we have a good idea on what it would be, but it’s a little bit unknown in terms of how those negotiations ultimately play out. So, I apologize it’s a long way of saying. We can’t give a detailed bridge, but that’s just because there are too many moving pieces. But I can’t tell you, I feel very comfortable with the cash flow profile that we are going to have when all is said and done.

Got it. Okay, thank you.

Thank you. And our next question comes from Sam Barrett of Robert W. Baird. Your line is now open.

Hi, good morning. Maybe quickly on the 2017 guidance, Dave, why not – or include the remaining 2016 closures and the impact of those in the 2017 guidance? I guess, is it just uncertain timing? And that’s reason for that? Or are you concerned that you might not be able to close them?

Certainly, so the S-1 that we filed early in February and effect of that capital rate would be to allow us to effect these closures expediently. That said, we recognize that we can’t speak much beyond that in terms of the S-1 filing, but we will recognize that it’s not a certain event. And so, how we look at it is, we would still close these remaining restaurants. We would do it over time though as the cash flow profile continues to improve, it would be over time versus in a specific timeframe. So that’s the biggest reason, just from a timing perspective, it’s a little unknown.

Thanks. And maybe just a follow-up on the refranchising, obviously not entirely nailed down, but I mean, as you think about it, do you think the refranchising can be accretive to EBIT or maybe EPS?

Yes, absolutely. We think in the short-term potentially not as much, but as you start the expectations with these that they will be able to grow at a faster rates than what we would as a company-owned system in terms of those markets. So they will be accretive as you begin to develop more restaurants in those areas. We think the actual effect of those restaurants themselves from a loss royalty stream relative – or I am sorry, a loss cash flow stream relative to royalty revenue would probably be relatively off that in the short-term.

Great. And then, maybe one last one, in terms of some of the operations improvements you are working on, it sounds like some encouraging progress on guest satisfaction and turnover. But maybe specifically, how long do you think it takes for those execution benefits to really gain traction with consumers and maybe lead to increased visits over time?

Certainly, so this is something obviously we’ve studied a ton and those in the industry has studied a ton. How we see the cadence, typically go, is that in a market or restaurant that’s struggling, and when you turn it around which first see at the people metrics start to improve which we have certainly seen that in terms of our turnover numbers, very pleased with what we are seeing there. After you see people metrics improve, you typically then see the operational metrics improve. We have seen that in our internal metrics whether the transaction times, food waste, labor management, et cetera. After people and operations improve, then you start seeing guest satisfaction scores improve. That’s what you are seeing with the SMG results. And then, finally, that’s when you start getting the sales traction. From the timing perspective, I think if there is still obviously some uncertainties in terms of when that completely begins to benefit the system, but I think we are very confident that those first three steps we’ve made a lot of success in. And our performance relative to Black Box index despite overlapping significant amount of discounting has improved. So I think we are already seeing some of those results and I would expect that those will continue through 2017 and beyond.

Great. Thanks for the color.

Thank you. And our next question comes from Jake Bartlett of SunTrust. Your line is now open.

Great. Thanks for taking the question. Dave, on the guidance for same-store sales, and where you currently are quarter-to-date, what gives you the confidence that things are going to accelerate? Is that, are you seeing some strong performance or stronger performance from those new LTOs? Or what is kind of giving you the confidence that you are going to accelerate from this – the level you’ve seen quarter-to-date?

Certainly, good question, Jake. So, as we said, our system-wide same-store sales thus far is about negative 1.4%. This is at a time and the guidance is reflected slightly negative. So what our guidance incorporates is a modest acceleration in our same-store sales performance. We feel pretty comfortable given that the numbers we have been posting have been as we’ve overlapped a significant amount of marketing. So we will stop having that headwind if you will from a same-store sales perspective. I am also giving great confidence when I look at the guest satisfaction and operational metrics that are absolutely moving in the right direction. And finally what we are seeing is that, we will be able to do some modest level of marketing on an ongoing perspective as we’ve now got operations in a manner that we feel that as we bring guests there, they will have a great experience. And so, I have a good amount of confidence. We are not going to get ahead of our skies in terms of what the expectations for in terms of the inflection point and what that ultimately drives. So we do expect there will be some modest improvements.

Okay, and then, as you assess the kind of due to the strength of the brand in – due to the relevance of the brand, is there a core number of stores that have been doing much better than the overall results that gives you confidence of the relevance and also, how do you think that just the increased competition within, in fast casual from store openings and that sort of things from competitors is affecting you? Just maybe the confidence on the core strength of the brand.

I mean, I feel as strong it is ever in the core strength of this brand. We are so unique, so different. We had so many of the macro consumer trends and desires, even thinking we don’t talk – we didn’t talk a lot about it on the call yet, but the To-Go experience, our food, travels lot and natural for that and that’s where guests are moving. We are already seeing ourselves at 45% of our business now being done off-premise. We feel really well positioned there. The core strength when you look at across the country, so many different markets, so many different restaurants that are highly, highly profitable with great cash-on-cash returns and great cash flow that I feel very, very comfortable with where we are positioned. From the competitive landscape perspective, I don’t think I am seeing anything new that everybody knows that fast casual itself has seen a significant amount of new players as well as growth from the existing stalwarts and I expect that will continue. I think it’s one reason why while our same-store sales has been relatively consistent, we have actually seen ourselves create a gap or improved significantly relative to where we were at versus the Black Box index. So I expect that will continue over time. What I love though is that there is no direct competitor for what we are doing and I think the efforts we are taking to make the guest experience better and to further enhance our menu is going to continue to position us for a pretty nice healthy growth for many, many years to come.

Okay. And then, lastly, with the – or the store closures and how it’s going to boost restaurant level margins, can you help us out in terms of the impact on the different, but various line items, I’d imagine that because these are kind of disperse stores that it will help COGS, and maybe just give us a little help on the moving pieces on restaurant margins?

Yes, you are going to see benefit kind of throughout, when we look at the guidance that we have for full year 2017 to put a bit more texture, I think it’s going to be somewhat evenly split actually between cost of goods sold, where we expect some benefit not just from the closures, but also from a little bit more favorable commodity environment. Labor certainly, these are restaurants that if you think about it 700,000 of average unit volume have not been very efficient. So we can expect that, 50 basis point to 100 basis point benefit in the labor line and then occupancy another one of the major fixed cost, which on the BAVs that you are talking about that one will also improve significantly. So I do think it will ultimately, Jake, to be spread pretty evenly throughout the P&L line items.

Okay. Helpful, thank you very much.

Thank you.

Thank you. [Operator Instructions] And our next question comes from Andrew Strelzik of BMO Capital Markets. Your line is now open.

Hey, thanks a lot. Good morning. First question I wanted to ask is on marketing. You are talking about how much more competitive it is in the number of options out there. And understanding the differentiation of the brand, but you are taking down marketing again after last year talking about how you needed to get more competitive on that front. So, when you are thinking about marketing in the context of building AUVs over time and acquiring new customers, how do you balance those two the downward trajectory of marketing versus that piece?

Certainly, so that’s something we certainly have quite a bit of thoughts on. Ultimately, there is an enormous opportunity for this brand when it comes to brand awareness. We have such a unique differentiated concept which is such a huge benefit in the long-term, but that also means that you have to work harder to build brand awareness and we traditionally have not spent very much resources in terms of bringing the brand to life from a marketing perspective. The marketing that we did do over the past year or two, I think ultimately our operations were not in a place where when we were bringing guests into experience the brand, they were getting the best experience. How we have been pretty clear with our strategic focus is first we need to get operations back to a level that we felt when we did activate the brand through marketing that we would be really giving a great experience in bringing loyal guests into the equation. I feel we are pretty darn close to that and I think you will start seeing us actually activating a marketing level spend that’s higher than where we are at today. But that said, we felt that would have been foolish to be doing too much marketing until we got some of these initiatives in place. What you can expect from a marketing perspective is, what we will be doing in the short-term is trying to accelerate lot of our digital media, direct mail, we will be doing traditional media in some of our more established markets and then we will expand from there as we go through time. But I think, there absolutely still is an enormous opportunity for us from a brand awareness perspective.

Okay and then you talked about some of the tests you are doing around the menu and bussing and To-Go and things like that streamlining the To-Go. Can you give us some numbers in terms of what percentage of the store base that is being tested? And now you said it’s going to rollout further, where should we be by the end of the year?

Sure, so, they are ultimately different aspects of the test. So with guest bussing in particular, we’ve been putting that into some of our newer restaurants as well as some of the test markets, we are seeing cleanliness scores improve kind of right off the bat and we feel that that’s one that’s absolutely logical one to pursue as well as the more seamless To-Go design. It’s still right now only in a small percentage of our system, maybe 5% at the most. So we would expect that those two items will move relatively quickly through the system and be done through in 2017. The enhancements to the menu which also include a different layout, a different pricing structure, improvements in investments in some of the food quality, those are the things that before we go nationwide, we want to make sure we absolutely have right. So those will take more time. And I would expect that that will be done in a cadence over kind of a set steady disciplined manner with iterations improving at each step and that will be done over the next probably 18 months or so.

And then my last question, if I could squeeze one more in. This year, you are going to have a step-up in the margins because of the closures. But I guess, I am just wondering underlying ex the closures, when you think about the margin progression over the next 12, 18, 24 months, labor is not going away, but you have some efficiencies you think you can get, it sounds like some favorable commodity movements this year, but maybe not as much going forward and then obviously the question is on comps. Do you think that, 2018 might be the year where we finally start to see the margin structure underlying stabilize or even start to improve recognizing obviously to the comps is the question?

Yes, certainly, I mean the closures obviously have a significant impact on the short and medium-term. From the P&L perspective and the economic model, labor is the component that there is lot of hard work to be done. But we believe there is tremendous upside in our labor efficiencies. Currently, since we do real cooking, we do everything cook to order. Accordingly, we have a pretty complex system in terms of how it’s operating in the back of the house. We’ve done a great job designing it over the years to make it as efficient as we could be, but we know that there is another step level progression that could occur and that’s one that’s going to take quite a bit of testing looking at different pieces of equipment processes, et cetera. We think there is meaningful upside on the labor side, at the same time we don’t incorporate that into guidance yet, because there is a lot of work to still be done to make sure that we ultimately land with the most efficient solution, but labor is where the upside of your question, labor is where we feel there is still good opportunity for us to improve margins.

Great. I appreciate the thoughts.

Thank you. And our next question comes from Jordy Winslow of Credit Suisse. Your line is now open.

Hi, thanks. This is Jordy on Clayton this morning. Dave, I had a question on the comps. What do you think explains the gap between company and franchise stores? And then how much variability in the company comps overall are you seeing across different markets? And then I had one follow-up. Thanks.

Sure, so, I’d first talk on the franchise side. I do actually believe that, Dave, because of their size, their scope, they are certainly committed to what we are working on that they have been able to implement our initiatives probably a bit faster than we’ve been able to on the company’s side. So I think they are starting to see the benefits of that a little bit earlier than what we are seeing in the larger system. That said, I would also keep in mind, it’s a pretty small base. So franchise same-store sales tend to be more volatile just based on that smaller segment. So, why I absolutely believe part of it is their implementation of our initiatives quicker than potentially the company side. There is that part of it that’s a small sample size. From a regional differentiation, it’s actually been relatively consistent. We still continue to see some challenges in the Colorado market, which as we’ve discussed in the past have seen as much of an influx of fast casual competition as probably another part of the country. So that’s one – that’s been a little bit of a laagered, if you will. But seeing overall, there is not been a very big volatility between the different geographies.

Got it. Thanks. And then, one on the openings, 12 to 15 for the company this year. Is that the right runrate to think about over the next few years, does that come down further, is there more room in the established markets you have today is to sustain that kind of pace?

We certainly believe that there is plenty of room in the markets that we already are in. So we think there is plenty of white space potential even without going to new markets. That said, we have a lot of initiatives that we are working on that we have made a ton of progress on, but we want to make sure that we’ve seen those through fruition before we began to accelerate growth again. So for 2018, expect that the growth will be again focused on healthy established markets that we already have a good presence and in our lower risk. The number might be a touch lower than what you see in 2017. And that’s probably as far I would go in terms of the expectations. I do believe this brand now, it’s again the differentiation, the fact that we do have seen so much success in so many different types of markets and restaurant trade areas has an enormous white space potential. So, while there will be this – the temporary kind of pause, we make sure we’ve got the execution of our initiatives. We still have a long road ahead of us in terms of white space.

Thank you.

Thank you. And our next question comes from David Palmer of RBC Capital Markets. Your line is now open.

Thanks. Good morning, Dave. Just going back to the store closures, obviously, the benefits of those, the other side of that is when those stores are bad they were really bad and when you are looking back on the placement of those stores, the format of those stores, what do you think are the lessons of that? And how you choose your sites, if it is the site selection going forward?

So, we don’t think – we think the selection process itself often the real estate was actually on the whole collectively strong. We’ve talked about in the past that one of the lessons we’ve learned is we do as well in kind of some of these urban neighborhoods. I think more important that we’ve learned is, the execution from an operations perspective is absolutely critical and I think the rapid expansion not having a commensurate investment in our training and in our operations team, that’s been the more of the culprit of the restaurants that ultimately were underperforming, more so than any concept or even a real estate selection process. When we do start to reevaluate unit growth, especially into new markets, what I do think you can expect is for us to be more likely to go into contiguous markets where there is more ability to gain brand awareness and to probably be doing it in a way that we build the saturation point with the number of restaurants we have making sure that we have the bench built to execute it at a high level. So I would ultimately answer your question by saying, the biggest thing that we are taking away from this is just how critical it is have operations up and running, gain some level of brand awareness to really get a market moving. I would say some of the markets that we have entered in the past couple of years that we’ve seen a lot of success on our markets where have had strong operations from the get go and the real estate has been very strong and we built the number of restaurants in a short amount of time to get some of those efficiencies. So markets like Phoenix, markets like Orlando, those are markets where from a real estate perspective, we opened several restaurants in a relatively short amount of time and it has great operations to back them up.

So, the thinking is that, operations was – is the major thing that you can do to swing your bottom quartile of stores, but grab in the case of storm, you didn’t have the luxury of waiting financially, you have to chop off that tail, try to help the others that sit above that whatever line you drew, is that’s something what you are doing?

Yes, that’s exactly right, Dave. So I mean, the team members that we’ve had in these restaurants that are closed, they are great, they are great team members. I mean, and ultimately over time, we’ve built the teams to be much stronger and they’ve done a nice job. But unfortunately, the cash flow losses that we’re currently overcoming in the burden and the long road it would take to build brand awareness and to bring to markets where they needed to go, we ultimately felt that was not worth the resources or the distraction.

And then, just as a quick follow-up. You mentioned that 45% of your business being off-premise, and it seems like your food travels well and that it should be a way that you can win. Forgive me if you discussed delivery, are you still in test with that? How is that going? And are you comping positively with your off – your take-up/slash delivery business currently, such that maybe we can see the future with that side?

Yes, that’s a great point. We haven’t talked about it as much as, because our main focus has been on the core execution of the concept. I believe To-Go in off-premise is an enormous opportunity. We have been comping positively on the overall off-premise occasion. Online ordering is up to 8% quarter-to-date thus far in Q1, which that tested at a few percent a few years ago. On the delivery perspective, still only in about 10% of our restaurants we’ve been using third-party providers. We are working closely with those folks to expand as all of you know, there is quite a bit of movement in that industry. So we absolutely still think there is great opportunity and that will be continuing to expand, I think more to come on how we approach it. One aspect that we haven’t really focused on and we talked about was, when you do order from Noodles & Company online, that’s a throughput equalizer for us. You come in, you get- you skip the line, pickup your food and you can go out or testing is a more seamless design, where it’s obvious where you go with the guest. If you prepaid, you’d literally just to go to a shelving area pick it up and you are out, that is such a benefit for our brand that you can expect that particularly initiative will continue to expand relatively quickly.

Thank you.

Thank you. And our next question comes from Jake Bartlett of SunTrust. Your line is now open.

Hi, I am just – calling up on that thought, or that the line of picking about, why the stores are closing. I look at the franchise system and there are largely in these kind of smaller markets with a just a handful of units. Is it the fact that they have been able to operate better and therefore those stores are doing okay? Or is it possible that we could see some franchise closures going forward?

There is always potential for seeing some franchise restaurants closing, but at the same time the difference, so we see success in Phoenix and Orlando, partially because we’ve executed the brand at a very high level and been able to really have the operations teams focused well. We are also seeing out the franchise community that they had to be more focused on the restaurants are in there day in and day out. It’s not the distraction that it ultimately is for the company side or has been for the company side. As a reminder, we’ve opened five or six new markets over the past three years. So the amount of distraction that’s occurred is in a different level of magnitude versus if you are the owner/operator in a specific market. So they have had more success than we have in the last couple of years in terms of executing that aspect of the brand.

Okay. And then lastly, you’ve always had lower kind of food cost in your typical fast casual concept which will have higher food cost, lower labor and you may comment about investing in food quality within some of the menu changes. Is that something we should expect where COGS start to move up more meaningfully as you work on the quality and kind of maybe or give consumers a little bit more than you have in the past?

That’s one reason why we are certainly being very disciplined with how we approach the rollout of menu initiatives. I think you can expect there will be some investment in the food cost side. We do believe that our supply chain team can identify opportunities to help us offset much of that investment. So I would not expect that our cost of goods sold starts moving into the 30% range or anything like that. I think it would be less – much less meaningful than that. But I do believe that you can expect over time to see us shave labor and have a little bit more on the COGS line.

And have you gone ahead and removed the naturally raised beef?

We did ultimately removed naturally raised, Jake, it was ultimately the supply chain was not necessarily able to keep with – add it with the cost that we felt was appropriate to continue to move forward. And you still believe that that’s something we are going to be pursuing over time. But given the supply chain constraints at the moment, we did ultimately removed naturally raised, Jake.

Thank you.

Thank you. And that concludes our question and answer session for today. Ladies and gentlemen thank you for participating in today’s conference. This does conclude the program and you may all disconnect. Have a great day everyone.