GNC 2009 Annual Report Download - page 22

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• 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.
Environmental Compliance
The South Carolina Department of Health and Environmental Control (DHEC) requested that we investigate our South Carolina facility for a
possible source or sources of contamination detected on an adjoining property. We have commenced the investigation at the facility as
requested by DHEC and will continue such investigation in 2009. The proceedings in this matter have not yet progressed to a stage where it is
possible to estimate the timing and extent of any remedial action that may be required, the ultimate cost of remediation, or the amount of our
potential liability.
In addition to the foregoing, we are subject to numerous federal, state, local, and foreign environmental and health and safety laws and
regulations governing our operations, including the handling, transportation, and disposal of our non-hazardous and hazardous substances and
wastes, as well as emissions and discharges from our operations into the environment, including discharges to air, surface water, and
groundwater. Failure to comply with such laws and regulations could result in costs for remedial actions, penalties, or the imposition of other
liabilities. New laws, changes in existing laws or the interpretation thereof, or the development of new facts or changes in our processes could
also cause us to incur additional capital and operation expenditures to maintain compliance with environmental laws and regulations and
environmental permits. We also are subject to laws and regulations that impose liability and cleanup responsibility for releases of hazardous
substances into the environment without regard to fault or knowledge about the condition or action causing the liability. Under certain of these
laws and regulations, such liabilities can be imposed for cleanup of previously owned or operated properties, or for properties to which
substances or wastes were sent in connection with current or former operations at our facilities. The presence of contamination from such
substances or wastes could also adversely affect our ability to sell or lease our properties, or to use them as collateral for financing. From time
to time, we have incurred costs and obligations for correcting environmental and health and safety noncompliance matters and for remediation
at or relating to certain of our properties or properties at which our waste has been disposed. We believe we have complied with, and are
currently complying with, our environmental obligations pursuant to environmental and health and safety laws and regulations and that any
liabilities for noncompliance will not have a material adverse effect on our business or financial performance. However, it is difficult to predict
future liabilities and obligations, which could be material. 17