IHOP 2015 Annual Report Download - page 30

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"good cause" to exist as a basis for the termination and/or non-renewal, advance notice to the franchisee of the termination or
non-renewal, an opportunity to cure a default and a repurchase of inventory or other compensation upon termination, these
provisions have not historically had a significant effect on our franchise operations.
Each restaurant is subject to licensing and regulation by a number of governmental authorities, which may include liquor
license authorities (primarily in the case of Applebee's restaurants), health, sanitation, safety, fire, building and other agencies
in the state or municipality in which the restaurant is located. We are also subject to new laws and regulations, which may vary
from jurisdiction to jurisdiction, relating to nutritional content and menu labeling.
More stringent and varied requirements of local governmental bodies with respect to zoning, land use and environmental
factors could delay or prevent the development of new restaurants in particular areas.
Various federal and state labor laws govern our relationship with employees and our franchisees' relationship with their
own employees. These include such matters as minimum wage requirements, overtime and other working conditions.
Significant additional government-imposed increases in minimum wages, paid leaves of absence, mandated health benefits or
increased tax reporting and tax payment requirements with respect to employees who receive gratuities could be detrimental to
the economic viability of our and our franchisees' restaurants.
We are subject to a number of privacy and data protection laws and regulations globally. The legislative and regulatory
landscape for privacy and data protection continues to evolve, and there has been an increase in attention given to privacy and
data protection issues with the potential to affect directly our business, including recently enacted laws and regulations in the
United States and internationally requiring notification to individuals and government authorities of security breaches involving
certain categories of personal information.
The Patient Protection and Affordable Care Act and the Health Care and Education Affordability Reconciliation Act of
2010 are far-reaching and are intended to expand access to health insurance coverage over time by adjusting the eligibility
thresholds for most state Medicaid programs and providing certain other individuals and small businesses with tax credits to
subsidize a portion of the cost of health insurance coverage. The laws include a requirement that most individuals obtain health
insurance coverage beginning in 2014 and a requirement that certain large employers offer coverage to their employees or pay a
financial penalty. We expect that our health insurance coverage expenses, and the health insurance coverage expenses of our
franchisees, will increase over the long term as a result of these laws, and any such increases could adversely affect our
business, cash flows, financial condition and results of operations.
In recent years, there has been an increased legislative, regulatory and consumer focus at the federal, state and municipal
levels on the food industry including nutrition and advertising practices. Restaurants operating in the quick-service and fast-
casual segments have been a particular focus. In addition to the United States Food and Drug Administration’s recently adopted
menu labeling requirements for restaurants, a number of other jurisdictions around the United States have adopted regulations
requiring that chain restaurants include calorie information on their menus or make other nutritional information available.
Initiatives in the area of nutrition disclosure or advertising, such as requirements to provide information about the nutritional
content of our food, may result in increased costs of compliance with the requirements and may also change customer buying
habits in a way that adversely impacts our sales. For further information regarding governmental regulation, see Item 1A, Risk
Factors.
Environmental Matters
We are subject to federal and state environmental regulations, but historically these have not had a material effect on our
operations. We are not aware of any federal, state or local environmental laws or regulations that are likely to materially impact
our revenues, cash flow or competitive position, or result in any material capital expenditure. However, we cannot predict the
effect of possible future environmental legislation or regulations. For further information regarding environmental matters, see
Item 1A, Risk Factors.
Employees
At December 31, 2015, we had approximately 975 employees, of whom approximately 500 were full-time, non-restaurant,
corporate personnel. Our employees are not presently represented by any collective bargaining agreements and we have never
experienced a work stoppage. We believe our relations with employees are good. Our franchisees are independent business
owners and their employees are not our employees. Therefore, their employees are not included in our employee count.