GNC 2008 Annual Report Download - page 20

Table of Contents
regulations, we have from time to time reformulated, eliminated, or relabeled certain of our products and revised certain provisions of our sales
and marketing program. We believe we are in material compliance with the various consent decrees and with applicable federal, state, and
local rules and regulations concerning our products and marketing program. Compliance with the provisions of national, state, and local
environmental laws and regulations has not had a material effect upon our capital expenditures, earnings, financial position, liquidity, or
competitive position.
Foreign
Our products sold in foreign countries are also subject to regulation under various national, local, and international laws that include
provisions governing, among other things, the formulation, manufacturing, packaging, labeling, advertising, and distribution of dietary
supplements and over-the-counter drugs. Government regulations in foreign countries may prevent or delay the introduction, or require the
reformulation, of certain of our products.
New Legislation or Regulation
We cannot determine what effect additional domestic or international governmental legislation, regulations, or administrative orders,
when and if promulgated, would have on our business in the future. New legislation or regulations may require the reformulation of certain
products to meet new standards, require the recall or discontinuance of certain products not capable of reformulation, impose additional record
keeping, or require expanded documentation of the properties of certain products, expanded or different labeling, or scientific substantiation.
Franchise Regulation
We must comply with regulations adopted by the FTC and with several state laws that regulate the offer and sale of franchises. The
FTC's Trade Regulation Rule on Franchising and certain state laws require that we furnish prospective franchisees with a franchise offering
circular containing information prescribed by the Trade Regulation Rule on Franchising and applicable state laws and regulations.
We also must comply with a number of state laws that regulate some substantive aspects of the franchisor-franchisee relationship. These
laws may limit a franchisor's business practices in a number of ways, including limiting the ability to:
• terminate or not renew a franchise without good cause;
• interfere with the right of free association among franchisees;
• disapprove the transfer of a franchise;
• discriminate among franchisees with regard to franchise terms and charges, royalties, and other fees; and
• place new stores near existing franchises.
To date, these laws have not precluded us from seeking franchisees in any given area and have not had a material adverse effect on our
operations. Bills intended to regulate certain aspects of franchise relationships have been introduced into Congress on several occasions
during the last decade, but none have been enacted. Revisions to the FTC rule have also been proposed by the FTC and currently are in the
comment stage of the rulemaking process.
Our international franchise agreements and franchise operations are regulated by various foreign laws, rules, and regulations. To date,
these laws have not precluded us from seeking franchisees in any given area and have not had a material adverse effect on our operations.
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