Panera Bread 2013 Annual Report Download - page 20

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If we fail to comply with governmental laws or regulations or if these laws or regulations change, our business could suffer.
In connection with the operation of our business, we are subject to extensive federal, state, local, and foreign laws and regulations
that are complex and vary from location to location, including those related to:
• franchise relationships;
• building construction and zoning requirements;
• nutritional content labeling and disclosure requirements;
• management and protection of the personal data of our employees and customers; and
• environmental matters.
Our bakery-cafes and fresh dough facilities are licensed and subject to regulation under federal, state, local and foreign laws,
including business, health, fire, and safety codes. For example, we are subject to the U.S. Americans with Disabilities Act, or
ADA, and similar state laws that give civil rights protections to individuals with disabilities in the context of employment, public
accommodations and other areas.
In addition, various federal, state, local and foreign labor laws govern our operations and our relationship with our associates,
including prevailing wages, overtime, accommodation and working conditions, benefits, work authorization requirements,
insurance matters, workers’ compensation, disability laws such as the ADA discussed above, child labor laws, and anti-
discrimination laws.
Although we believe that compliance with these laws has not had a material adverse effect on our operations to date, we may
experience material difficulties or failures with respect to compliance with such laws in the future. Our failure to comply with
these laws could result in required renovations to our facilities, litigation, fines, penalties, judgments, or other sanctions including
the temporary suspension of bakery-cafe or fresh dough facility operations or a delay in construction or opening of a bakery-cafe,
any of which could adversely affect our business and our reputation.
In addition, new government initiatives or changes to existing laws, such as the adoption and implementation of national, state,
or local government proposals relating to increases in minimum wage rates, may increase our costs of doing business and adversely
affect our results of operations.
Regulatory changes in and customer focus on nutrition and advertising practices could adversely affect our business.
There continues to be increased consumer emphasis on and regulatory scrutiny of restaurants operating in the quick-service and
fast-casual segments with respect to nutrition and advertising practices. While we have responded to these developments by
updating our menu boards and printed menus in all of our Company-owned bakery-cafes to include caloric information, we may
become subject to other regulations in the area of nutrition disclosure or advertising which would require us to make certain
additional nutritional information available to our customers or restrict the sales of certain types of ingredients. We may experience
higher costs associated with the implementation and oversight of such changes that could have an adverse impact on our business.
Rising insurance costs could negatively impact our profitability.
We self-insure a significant portion of potential losses under our workers’ compensation, medical, general, auto, and property
liability programs. The liabilities associated with the risks that are retained by us are estimated, in part, by considering our historical
claims experience and data from industry and other actuarial sources. The estimated accruals for these liabilities could be affected
if claims differ from these assumptions and historical trends. Unanticipated changes in the actuarial assumptions and management
estimates underlying our reserves of these losses could result in materially different amounts of expense under these programs,
which could have a material adverse effect on our consolidated financial condition and results of operations.
We are subject to complaints and litigation that could have an adverse effect on our business.
In the ordinary course of our business, we have been, and we expect that in the future we will be, subject to complaints and litigation
alleging that we are responsible for customer illness or injury suffered during or after a visit to one of our Company-owned bakery-
cafes or franchise-operated bakery-cafes, including allegations of poor food quality, food-borne illness, adverse health effects,
nutritional content or allergens, advertising claims or personal injury claims. In addition, from time to time, we are subject to
litigation by employees, investors, franchisees, and others through private actions, class actions or other forums, including those
alleging violations of various federal and state wage and hour laws regarding, among other things, overtime eligibility and failure