Dunkin' Donuts 2015 Annual Report Download - page 31

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Franchisee Litigation. Franchisees are subject to a variety of litigation risks, including, but not limited to, customer claims,
personal-injury claims, environmental claims, employee allegations of improper termination and discrimination, claims related
to violations of the ADA, religious freedom, the Fair Labor Standards Act, the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and intellectual-property claims. Each of these claims may increase costs and limit the funds
available to make royalty payments and reduce the execution of new franchise arrangements.
Potential Conflicts with Franchisee Organizations. Although we believe our relationship with our franchisees is open and
strong, the nature of the franchisor-franchisee relationship can give rise to conflict. In the U.S., our approach is collaborative in
that we have established district advisory councils, regional advisory councils, and a national brand advisory council for each
of the Dunkin’ Donuts brand and the Baskin-Robbins brand. The councils are comprised of franchisees, brand employees, and
executives, and they meet to discuss the strengths, weaknesses, challenges, and opportunities facing the brands as well as the
rollout of new products and projects. Internationally, our operations are primarily conducted through joint ventures with local
licensees, so our relationships are conducted directly with our licensees rather than separate advisory committees. No material
disputes with franchisee organizations exist in the United States or internationally at this time.
Failure to retain our existing senior management team or the inability to attract and retain new qualified personnel could
hurt our business and inhibit our ability to operate and grow successfully.
Our success will continue to depend to a significant extent on our executive management team and the ability of other key
management personnel to replace executives who retire or resign. We may not be able to retain our executive officers and key
personnel or attract additional qualified management personnel to replace executives who retire or resign. Failure to retain our
leadership team and attract and retain other important personnel could lead to ineffective management and operations, which
could materially and adversely affect our business and operating results.
Unforeseen weather or other events, including terrorist threats or activities, may disrupt our business.
Unforeseen events, including war, terrorism, and other international, regional, or local instability or conflicts (including labor
issues), embargos, public health issues (including tainted food, food-borne illnesses, food tampering, or water supply or
widespread/pandemic illness such as Ebola, the avian or H1N1 flu, MERS), and natural disasters such as earthquakes,
tsunamis, hurricanes, or other adverse weather and climate conditions, whether occurring in the U.S. or abroad, could disrupt
our operations or that of our franchisees or suppliers; or result in political or economic instability. These events could reduce
traffic in our restaurants and demand for our products; make it difficult or impossible for our franchisees to receive products
from their suppliers; disrupt or prevent our ability to perform functions at the corporate level; and/or otherwise impede our or
our franchisees’ ability to continue business operations in a continuous manner consistent with the level and extent of business
activities prior to the occurrence of the unexpected event or events, which in turn may materially and adversely impact our
business and operating results.
Risks related to our common stock
Our stock price could be extremely volatile and, as a result, you may not be able to resell your shares at or above the price
you paid for them.
Since our initial public offering in July 2011, the price of our common stock, as reported by NASDAQ, has ranged from a low
of $23.24 on December 15, 2011 to a high of $56.79 on July 14, 2015. In addition, the stock market in general has been highly
volatile. As a result, the market price of our common stock is likely to be similarly volatile, and investors in our common stock
may experience a decrease, which could be substantial, in the value of their stock, including decreases unrelated to our
operating performance or prospects, and could lose part or all of their investment. The price of our common stock could be
subject to wide fluctuations in response to a number of factors, including those described elsewhere in this report and others
such as:
• variations in our operating performance and the performance of our competitors;
• actual or anticipated fluctuations in our quarterly or annual operating results;
• publication of research reports by securities analysts about us, our competitors, or our industry;
• our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may
give to the market;
• additions and departures of key personnel;
• strategic decisions by us or our competitors, such as acquisitions, divestitures, spin-offs, joint ventures, strategic
investments, or changes in business strategy;