Jack In The Box 2009 Annual Report Download - page 13

Table of Contents
sections captioned “Business,” “Legal Proceedings,” “Consolidated Financial Statements” and “Management’s Discussion and Analysis
of Financial Condition and Results of Operations,” including statements regarding our strategic plans and operating strategies. Although
we believe that the expectations reflected in our forward-looking statements are based on reasonable assumptions, such expectations may
prove to be materially incorrect due to known and unknown risks and uncertainties.
In some cases, information regarding certain important factors that could cause actual results to differ materially from any forward-
looking statement appears together with such statement. In addition, the factors described under “Risk Factors” and “Critical Accounting
Estimates,” as well as other possible factors not listed, could cause actual results and/or goals to differ materially from those expressed in
forward-looking statements. As a result, investors should not place undue reliance on such forward-looking statements, which speak only
as of the date of this report. The Company is under no obligation to update forward-looking statements, whether as a result of new
information or otherwise.
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We caution you that our business and operations are subject to a number of risks and uncertainties. The factors listed below are
important factors that could cause actual results to differ materially from our historical results and from projections in forward-looking
statements contained in this report, in our other filings with the Securities and Exchange Commission (“SEC”), in our news releases and
in oral statements by our representatives. However, other factors that we do not anticipate or that we do not consider significant based on
currently available information may also have an adverse effect on our results.
Risks Related to the Food Service Industry. Food service businesses may be materially and adversely affected by changes in
consumer tastes, national and regional economic and political conditions, and changes in consumer eating habits, whether based on new
information regarding diet, nutrition and health, or otherwise. Recessionary economic conditions, including higher levels of
unemployment, lower levels of consumer confidence, and decreased consumer spending can reduce restaurant traffic and sales and
impose practical limits on pricing. If recessionary economic conditions persist for an extended period of time, consumers may make long-
lasting changes to their spending behavior. The performance of individual restaurants may be adversely affected by factors such as
traffic patterns, demographics and the type, number and location of competing restaurants, as well as local regulatory and political
conditions, terrorist acts or government responses, weather conditions and catastrophic events such as earthquakes, fires, floods or other
natural disasters.
Multi-unit food service businesses such as ours can also be materially and adversely affected by widespread negative publicity of
any type, particularly regarding food quality, nutritional content, illness or public health issues (such as epidemics or the prospect of a
pandemic), obesity, safety, injury or other health concerns. Adverse publicity in these areas could damage the trust customers place in our
brand. We have taken steps to mitigate each of these risks. To minimize the risk of food-borne illness, we have implemented a HACCP
system for managing food safety and quality. Nevertheless, these risks cannot be completely eliminated. Any outbreak of such illness
attributed to our restaurants or within the food service industry or any widespread negative publicity regarding our brands or the
restaurant industry in general could cause a decline in our sales and have a material adverse effect on our financial condition and results
of operations.
Unfavorable trends or developments concerning factors such as inflation, increased cost of food, labor, fuel, utilities, technology,
insurance and employee benefits (including increases in hourly wages, workers’ compensation and other insurance costs and premiums),
increases in the number and locations of competing restaurants, regional weather conditions and the availability of qualified, experienced
management and hourly employees, may also adversely affect the food service industry in general. Because a significant number of our
restaurants are company-operated, we may have greater exposure to operating cost issues than chains that are more heavily franchised.
Exposure to these fluctuating costs, including increases in commodity costs, could negatively impact our margins. Our continued success
will depend in part on our ability to anticipate, identify and respond to changing conditions.
Risks Associated with Suppliers. Dependence on frequent deliveries of fresh produce and other food products subjects food service
businesses such as ours to the risk that shortages or interruptions in supply could adversely affect the availability, quality and cost of
ingredients or require us to incur additional costs to obtain adequate
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