GNC 2009 Annual Report Download - page 32

Table of Contents
• incurring additional indebtedness and issuing preferred stock;
• granting liens on our assets;
• making investments;
• consolidating or merging with, or acquiring, another business;
• selling or otherwise disposing our assets;
• paying dividends and making other distributions to GNC Parent LLC or GNC Corporation;
• entering into transactions with our affiliates; and
• incurring capital expenditures in excess of limitations set within the agreement.
Our ability to comply with these covenants and other provisions of the 2007 Senior Credit Facility and the indentures governing the Senior
Toggle Notes and the 10.75% Senior Subordinated Notes may be affected by changes in our operating and financial performance, changes in
general business and economic conditions, adverse regulatory developments, or other events beyond our control. The breach of any of these
covenants could result in a default under our debt, which could cause those and other obligations to become immediately due and payable. If
any of our debt is accelerated, we may not be able to repay it.
The senior credit facility also requires that we meet specified financial ratios, including, but not limited to, maximum total leverage ratios.
These restrictions may prevent us from taking actions that we believe would be in the best interest of our business and may make it difficult for
us to successfully execute our business strategy or effectively compete with companies that are not similarly restricted.
ITEM 1B. UNRESOLVED STAFF COMMENTS.
None.
ITEM 2. PROPERTIES.
As of December 31, 2008, there were 6,630 GNC store locations globally. In our Retail segment, all but one of our company-owned stores
are located on leased premises that typically range in size from 1,000 to 2,000 square feet. In our Franchise segment, primarily all of our
franchised stores in the United States and Canada are located on premises we lease and then sublease to our respective franchisees. All of
our franchised stores in the remaining international markets are owned or leased directly by our franchisees. No single store is material to our
operations. 27