Dunkin' Donuts 2015 Annual Report Download - page 24

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markets and other factors beyond our control. There can be no assurance that market conditions will be favorable at the times
that we require new or additional financing.
The indenture governing the securitized debt will restrict the cash flow from the entities subject to the securitization to any
of our other entities and upon the occurrence of certain events, cash flow would be further restricted.
In the event that a rapid amortization event occurs under the indenture (including, without limitation, upon an event of default
under the indenture or the failure to repay the securitized debt at the end of the applicable term), the funds available to us would
be reduced or eliminated, which would in turn reduce our ability to operate or grow our business.
Infringement, misappropriation, or dilution of our intellectual property could harm our business.
We regard our Dunkin’ Donuts® and Baskin-Robbins® trademarks as having significant value and as being important factors in
the marketing of our brands. We have also obtained trademark protection for the trademarks associated with several of our
product offerings and advertising slogans, including “America Runs on Dunkin’ ® ” and “What are you Drinkin’? ® ”. We
believe that these and other intellectual property are valuable assets that are critical to our success. We rely on a combination of
protections provided by contracts, as well as copyright, patent, trademark, and other laws, such as trade secret and unfair
competition laws, to protect our intellectual property from infringement, misappropriation, or dilution. We have registered
certain trademarks and service marks and have other trademark and service mark registration applications pending in the
United States and foreign jurisdictions. However, not all of the trademarks or service marks that we currently use have been
registered in all of the countries in which we do business, and they may never be registered in all of those countries.
Although we monitor trademark portfolios both internally and through external search agents and impose an obligation on
franchisees to notify us upon learning of potential infringement, there can be no assurance that we will be able to adequately
maintain, enforce, and protect our trademarks or other intellectual property rights. We are aware of names and marks similar to
our service marks being used by other persons. Although we believe such uses will not adversely affect us, further or currently
unknown unauthorized uses or other infringement of our trademarks or service marks could diminish the value of our brands
and may adversely affect our business. Effective intellectual property protection may not be available in every country in which
we have or intend to open or franchise a restaurant or license our intellectual property. Failure to adequately protect our
intellectual property rights could damage our brands and impair our ability to compete effectively. Even where we have
effectively secured statutory protection for our trade secrets and other intellectual property, our competitors may misappropriate
our intellectual property and our employees, consultants, and suppliers may breach their contractual obligations not to reveal
our confidential information, including trade secrets. Although we have taken measures to protect our intellectual property,
there can be no assurance that these protections will be adequate or that third parties will not independently develop products or
concepts that are substantially similar to ours. Despite our efforts, it may be possible for third-parties to reverse engineer,
otherwise obtain, copy, and use information that we regard as proprietary. Furthermore, defending or enforcing our trademark
rights, branding practices, and other intellectual property, and seeking an injunction and/or compensation for misappropriation
of confidential information, could result in the expenditure of significant resources and divert the attention of management,
which in turn may materially and adversely affect our business and operating results.
Our brands may be limited or diluted through franchisee and third-party activity.
Although we monitor and restrict franchisee activities through our franchise and license agreements, franchisees or third parties
may refer to or make statements about our brands that do not make proper use of our trademarks or required designations, that
improperly alter trademarks or branding, or that are critical of our brands or place our brands in a context that may tarnish their
reputation. This may result in dilution or tarnishment of our intellectual property. It is not possible for us to obtain
registrations for all possible variations of our branding in all territories where we operate. Franchisees, licensees or third
parties may seek to register or obtain registration for domain names and trademarks involving localizations, variations, and
versions of certain branding tools, and these activities may limit our ability to obtain or use such rights in such territories.
Franchisee noncompliance with the terms and conditions of our franchise or license agreements may reduce the overall
goodwill of our brands, whether through the failure to meet health and safety standards, engage in quality control or maintain
product consistency, or through the participation in improper or objectionable business practices.
Moreover, unauthorized third parties may use our intellectual property to trade on the goodwill of our brands, resulting in
consumer confusion or dilution. Any reduction of our brands’ goodwill, consumer confusion, or dilution is likely to impact
sales, and could materially and adversely impact our business and operating results.
We are and may become subject to third-party infringement claims or challenges to the validity of our intellectual property.
We are and may, in the future, become the subject of claims for infringement, misappropriation or other violation of intellectual
property rights, which may or not be unfounded, from owners of intellectual property in areas where our franchisees operate or