GNC 2011 Annual Report Download - page 23

Table of Contents
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. These laws may limit a
franchisor's business practices in a number of ways. 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
In March 2008, the South Carolina Department of Health and Environmental Control ("DHEC") requested that we investigate contamination associated
with historical activities at our South Carolina facility. These investigations have identified chlorinated solvent impacts in soils and groundwater that extend
offsite from our facility. We are awaiting DHEC approval of the scope of additional investigations in order to understand the extent of these impacts and
develop appropriate remedial measures for DHEC approval. At this state of the investigation, however, it is not 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 its operations, including the handling, transportation and disposal of our non-hazardous and hazardous substances and wastes, as well as emissions
and discharges from its 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 their processes could also cause us to incur additional capital and operating expenditures to maintain
compliance with environmental laws and regulations and environmental permits. We are also 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 that were sent in connection with current or former operations at its facilities. The presence of contamination from such
substances or wastes could also adversely affect our ability to sell or lease its properties, or to use them as collateral for financing. From time to time, we
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