GNC 2011 Annual Report Download - page 37

Table of Contents
documentation for the joint venture was not executed on the timeframe that we had expected and there can be no assurances that we will enter into a joint
venture with BFG or any other party. Our lack of experience operating in new markets and our lack of familiarity with local economic, political and
regulatory systems could prevent us from achieving the results that we expect on our anticipated timeframe or at all. If we are unsuccessful in expanding into
new or high growth markets, it could adversely affect our operating results and financial condition.
Our network and communications systems are dependent on third-party providers and are vulnerable to system interruption and damage, which could
limit our ability to operate our business and could have a material adverse effect on our business, financial condition or results of operations.
Our systems and operations and those of our third-party Internet service providers are vulnerable to damage or interruption from fire, flood,
earthquakes, power loss, server failure, telecommunications and Internet service failure, acts of war or terrorism, computer viruses and denial-of-service
attacks, physical or electronic breaches, sabotage, human error and similar events. Any of these events could lead to system interruptions, processing and
order fulfillment delays and loss of critical data for us, our suppliers, or our Internet service providers, and could prevent us from processing customer
purchases. Any significant interruption in the availability or functionality of our website or our customer processing, distribution, or communications systems,
for any reason, could seriously harm our business, financial condition, and operating results. The occurrence of any of these factors could have a material
adverse effect on our business, financial condition or results of operations.
Because we are dependent on third-party service providers for the implementation and maintenance of certain aspects of our systems and operations and
because some of the causes of system interruptions may be outside of our control, we may not be able to remedy such interruptions in a timely manner, if at
all. As we rely on our third-party service providers, computer and communications systems and the Internet to conduct our business, any system disruptions
could have a material adverse effect on our business, financial condition or results of operations.
Privacy protection is increasingly demanding, and the introduction of electronic payment exposes us to increased risk of privacy and/or security breaches
as well as other risks.
The protection of customer, employee, vendor, franchisee and other business data is critical to us. Federal, state, provincial and international laws and
regulations govern the collection, retention, sharing and security of data that we receive from and about our employees, customers, vendors and franchisees.
The regulatory environment surrounding information security and privacy has been increasingly demanding in recent years, and may see the imposition of
new and additional requirements. Compliance with these requirements may result in cost increases due to necessary systems changes and the development of
new processes to meet these requirements by us and our franchisees. In addition, customers and franchisees have a high expectation that we will adequately
protect their personal information. If we or our service provider fail to comply with these laws and regulations or experience a significant breach of customer,
employee, vendor, franchisee or other company data, our reputation could be damaged and result in an increase in service charges, suspension of service, lost
sales, fines or lawsuits.
The use of credit payment systems makes us more susceptible to a risk of loss in connection with these issues, particularly with respect to an external
security breach of customer information that we or third parties (including those with whom we have strategic alliances) under arrangements with us control.
In the event of a security breach, theft, leakage, accidental release or other illegal activity with respect to employee, customer, vendor, franchisee third party,
with whom we have strategic alliances or other company data, we could become subject to various claims, including
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