Panera Bread 2015 Annual Report Download - page 22

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Economic conditions in the United States and globally could adversely affect our business and financial results and have
a material adverse effect on our liquidity and capital resources as well as that of our suppliers.
As our business depends upon consumer discretionary spending, our financial results are sensitive to broader macroeconomic
conditions. Our customers may make fewer discretionary purchases as a result of, for example, unemployment, increased fuel
and energy costs, foreclosures, bankruptcies, reduced access to credit and falling home prices. Because a key point in our business
strategy is maintaining our transaction counts, average check amount and margin growth, any significant decrease in customer
traffic or average profit per transaction resulting from fewer purchases by our customers or our customers' preferences to trade
down to lower priced products on our menu will negatively impact our financial performance. If negative economic conditions
persist for an extended period of time or worsen, consumers may make long-lasting changes to their discretionary purchasing
behavior, including less frequent discretionary purchases on a more permanent basis. Additionally, financial difficulties experienced
by our suppliers could result in product delays or shortages. Although the economy is showing signs of a recovery, the ability of
the United States economy to sustain this recovery is likely to be affected by several national and global factors that are outside
of our control.
Damage to our brands or reputation could negatively impact our business.
Our success depends substantially on the value of our brands and our reputation for offering high-quality food and a memorable
experience with superior customer service. Our brands have been highly rated in annual consumer surveys and have received
high recognition in industry publications. We believe that we must protect and grow the value of our brands through our Concept
Essence 2015 to differentiate ourselves from our competitors and continue our success. Any incident that erodes consumer trust
in or affinity for our brands could significantly reduce their value and have an adverse effect on our business.
Loss of senior management could adversely affect our future success.
Our success depends on the services of our senior management, all of whom are “at will” employees. The loss of a member of
senior management could have an adverse impact on our business or the financial market’s perception of our ability to continue
to grow.
We may be exposed to uncertainties and risks in Canada that could negatively impact our consolidated results of operations.
We expanded our Company-owned and franchise-operated operations into Canadian markets. Our expansion into Canada has
made us subject to Canadian economic conditions, particularly currency exchange rate fluctuations, increased regulations, quotas,
tariffs, and political factors, any of which could have a material adverse effect on our consolidated financial condition and results
of operations as our Canadian operations continue to expand. Further, we may be exposed to new forms of competition not present
in our domestic markets, as well as subject to potentially different demographic tastes and preferences for our products.
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 minimum wage requirements, 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.