GNC 2011 Annual Report Download - page 36

Table of Contents
from sales to Rite Aid (including license fee revenue for new store openings) represented approximately 3.5% of total revenue for the year ended
December 31, 2010. Any liquidity and operational issues that Rite Aid may experience could impair its ability to fulfill its obligations and commitments to us,
which would adversely affect our operating results and financial condition.
Economic, political and other risks associated with our international operations could adversely affect our revenues and international growth prospects.
As of December 31, 2010, we had 169 company-owned Canadian stores and 1,437 international franchise stores in 46 countries. We derived 11.1% and
10.2% of our revenues for the years ended December 31, 2010 and 2009, respectively, from our international operations. As part of our business strategy, we
intend to expand our international franchise presence. Our international operations are subject to a number of risks inherent to operating in foreign countries,
and any expansion of our international operations will increase the effects of these risks. These risks include, among others:
political and economic instability of foreign markets;
foreign governments' restrictive trade policies;
inconsistent product regulation or sudden policy changes by foreign agencies or governments;
the imposition of, or increase in, duties, taxes, government royalties or non-tariff trade barriers;
difficulty in collecting international accounts receivable and potentially longer payment cycles;
difficulty of enforcing contractual obligations of foreign franchisees;
increased costs in maintaining international franchise and marketing efforts;
problems entering international markets with different cultural bases and consumer preferences;
fluctuations in foreign currency exchange rates; and
operating in new, developing or other markets in which there are significant uncertainties regarding the interpretation, application and
enforceability of laws and regulations relating to contract and intellectual property rights.
Any of these risks could have a material adverse effect on our international operations and our growth strategy.
We may be unable to successfully expand our operations into China and other new markets.
If the opportunity arises, we may expand our operations into new and high-growth markets including, but not limited to, China. For example, we have
commenced the process of product registrations and wholesale sales in China. However, there is no assurance that we will expand our operations in China and
other markets in our desired time frame. To expand our operations into new markets, we may enter into business combination transactions, make acquisitions
or enter into strategic partnerships, joint ventures or alliances, any of which may be material. We may enter into these transactions to acquire other businesses
or products to expand our products or take advantage of new developments and potential changes in the industry. Although our Parent has entered into a non-
binding term sheet with an affiliate of Bright Food (Group) Co., Ltd. ("BFG") to market and sell nutritional supplements in China through a joint venture, the
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