Content analysis
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Financial report summary
?Risks
- Our business strategy may not be successful or achieve the desired results, which may have an adverse impact on our business and financial results.
- The global and domestic economic and geopolitical environment may negatively affect frequency of Guest visits and average ticket spend at our restaurants, which would negatively affect our revenues and our results of operations.
- Our success depends on our ability to effectively compete in the restaurant industry to attract and retain Guests.
- Decreased cash flow from operations, or an inability to access credit or successfully execute our potential sale-leaseback transactions could negatively affect our business initiatives or may result in our inability to execute our revenue, expense, and capital deployment strategies.
- If we are unable to comply with the financial and other covenants in our Credit Facility, our financial condition could be negatively affected.
- A privacy or security breach involving our information technology systems, or the failure of our data security measures could interrupt our business, damage our reputation, and negatively affect our operations and profits.
- If there is a material failure in our information technology systems, our business operations and profits could be negatively affected, and our systems may be inadequate to support our future growth strategies.
- Our marketing and branding strategies to attract, engage, and retain our Guests, including anticipated changes to our loyalty program, may not be successful, which could negatively affect our business.
- If we are unable to effectively use and monitor social media, our marketing efforts as well as our reputation could be harmed, which could negatively impact our restaurant sales and financial performance.
- Changes in consumer preferences could negatively affect our results of operations.
- We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases, and risks related to renewal.
- Changes in consumer buying patterns, particularly due to declines in traffic near our leased locations, and increases in online sales, may affect our revenues, operating results, and liquidity.
- Our operations are susceptible to the changes in cost and availability of commodities which could negatively affect our operating results.
- We may experience interruptions in the delivery of food and other products from third parties.
- Price increases may negatively affect Guest visits.
- New or improved technologies or changes in consumer behavior facilitated by these technologies could negatively affect our business.
- Expanding our restaurant base is a component of our long-term growth and our ability to open and profitably operate new restaurants is subject to factors beyond our control.
- The ongoing need for maintenance and improvements at our existing restaurants requires us to spend significant capital and we may not achieve a return on investment.
- We are subject to the risks presented by acquisitions or refranchising.
- New or less mature restaurants, once opened, may vary in profitability and levels of operating revenue for six months or more.
- The large number of Company-owned restaurants concentrated in the Western United States makes us susceptible to changes in economic and other trends in that region.
- We rely on our Senior Executive Team for the development and execution of our business strategy and the loss of any member of our Senior Executive Team could negatively affect our operating results.
- If we are unable to successfully recruit and retain qualified restaurant management and operations Team Members in an increasingly competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance.
- Our revenues and operating results may fluctuate significantly due to various risks and unexpected circumstances, including adverse weather conditions, natural disasters, climate change, pandemics, and other factors outside our control that could increase costs, disrupt our supply change, and impact seasonality, among other things.
- Our franchisees could take actions that could harm our business, expose us to liability or damage our reputation.
- Food safety and food-borne illness concerns, and any related unfavorable publicity could have an adverse effect on our business.
- Health concerns relating to the consumption of beef, chicken, or other food products could affect consumer preferences and could negatively affect our results of operations.
- Our business could be adversely affected by increased labor costs, including costs related to the increase in minimum wage and new health care laws.
- Our failure to remain in compliance with governmental laws and regulations as they continually evolve, and the associated costs of compliance, could cause our business results to suffer.
- Our future success depends on our ability to protect our intellectual property.
- The Company's effective tax rate could be volatile and materially change as a result of changes in tax laws.
- A significant increase in litigation could have a material adverse effect on our results of operations, financial condition, and business prospects.
- Labor organizing could adversely affect our operations and harm our competitive position in the restaurant industry, which could harm our financial performance.
- Our current insurance may not provide adequate levels of coverage against claims.
- The market price of our common stock is subject to volatility, which has and may continue to attract the interest of activist stockholders or subject us to securities litigation, which could cause us to incur significant expenses, hinder execution of our strategy and impact our stock price.
- We may not continue to repurchase our common stock pursuant to our share repurchase program, and any repurchases may not enhance long-term stockholder value. Share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves.
Management Discussion
- ITEM 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
- Management's Discussion and Analysis of Financial Condition and Results of Operations provides a narrative of our financial performance and condition that should be read in conjunction with the accompanying consolidated financial statements.
- refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 25, 2022, filed with the SEC on February 28, 2023.