Fiesta Restaurant (FRGI) Financial Report Summaries

Risks

• The market in which we compete is highly competitive, and we may not be able to compete effectively.
• Factors applicable to the quick-service and fast-casual restaurant segments may adversely affect our results of operations, which may cause a decrease in earnings and revenues.
• Our continued growth depends on our ability to open and operate new restaurants profitably, which in turn depends on our continued access to capital, and newly developed restaurants may not perform as we expect and there can be no assurance that our growth and development plans will be achieved.
• Customer preferences and traffic could be adversely impacted by health concerns about certain food products, reports of food-borne illnesses or food safety issues, any of which could result in a decrease in demand for our products.
• An increase in food costs, including those caused by inflation, climate change, the COVID-19 pandemic, and global conflicts, could adversely affect our operating results.
• If a significant disruption in service or supply by any of our suppliers or distributors were to occur, it could create disruptions in the operations of our restaurants, which could have a material adverse effect on our business.
• The success of our marketing programs and the impact of those of our competitors could have a material adverse effect on our results of operations and financial condition.
• Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media could have a material adverse impact on our business.
• If we are not able to hire, train, reward and retain qualified restaurant employees and/or appropriately maintain our workforce, our growth plan and profitability could be adversely affected.
• Increases in labor costs could adversely impact our operating results.
• Cybersecurity breaches or other privacy or data security incidents that expose confidential guest, personal employee and other material, confidential information that is stored in our systems in connection with our electronic processing of credit and debit card transactions or security breaches of confidential employee information that is stored in our systems or by third parties on our behalf may adversely affect our business.
• If we fail to comply with privacy and data protection laws, we could be subject to government enforcement actions, private litigation and adverse publicity.
• Our digital business, which we expect to grow as a percentage of sales, is subject to risks.
• Our business is regional, and we therefore face risks related to reliance on certain markets as well as risks for other unforeseen events.
• Economic downturns may adversely impact consumer spending patterns.
• Our expansion into new markets may present increased risks due to a lack of market awareness of our brands.
• Changes in accounting standards or the recognition of impairment or other charges may adversely affect our future results of operations.
• Government regulation could adversely affect our financial condition and results of operations.
• If one of our employees sells alcoholic beverages to an intoxicated patron or to a minor, we may be liable to third parties for the acts of the patron or incur significant fines or penalties.
• We may incur significant liability or reputational harm if claims are brought against us or against our franchisees.
• Our franchisees or licensees could take actions that harm our reputation.
• Federal, state and local environmental regulations relating to the use, storage, discharge, emission and disposal of hazardous materials could expose us to liabilities, which could adversely affect our results of operations.
• Major developments on trade relations could have a material adverse effect on our business.
• We are subject to all of the risks associated with leasing property subject to long-term non-cancelable leases.
• Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand.
• Our senior credit facility restricts our ability to engage in some business and financial transactions.
• We do not expect to pay any cash dividends for the foreseeable future, and our senior credit facility limits our ability to pay dividends to our stockholders.
• If securities analysts do not publish research or reports about our business or if they downgrade our stock, the price of our stock could decline.
• Percentage ownership of our common stock may be diluted in the future.
• Proxy contests threatened or commenced against us could be disruptive and costly, and adversely affect our business, operation results and financial condition.
• Provisions in our restated certificate of incorporation and amended and restated bylaws or Delaware law might discourage, delay or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.