Pizza Hut 2008 Annual Report Download - page 138

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16
Franchising
A substantial number of the restaurants of each of the Concepts are franchised to independent businesses operating under
arrangements with the Concepts. In the course of the franchise relationship, occasional disputes arise between the
Company and its Concepts’ franchisees relating to a broad range of subjects, including, without limitation, quality,
service, and cleanliness issues, contentions regarding grants, transfers or terminations of franchises, territorial disputes
and delinquent payments.
Suppliers
The Company, through approved distributors, purchases food, paper, equipment and other restaurant supplies from
numerous independent suppliers throughout the world. These suppliers are required to meet and maintain compliance
with the Company’s standards and specifications. On occasion, disputes arise between the Company and its suppliers on
a number of issues, including, but not limited to, compliance with product specifications and terms of procurement and
service requirements.
Employees
At any given time, the Company or its affiliates employ hundreds of thousands of persons, primarily in its restaurants. In
addition, each year thousands of persons seek employment with the Company and its restaurants. From time to time,
disputes arise regarding employee hiring, compensation, termination and promotion practices.
Like other retail employers, the Company has been faced in a few states with allegations of purported class-wide wage
and hour and other labor law violations.
Customers
The Company’s restaurants serve a large and diverse cross-section of the public and in the course of serving so many
people, disputes arise regarding products, service, accidents and other matters typical of large restaurant systems such as
those of the Company.
Intellectual Property
The Company has registered trademarks and service marks, many of which are of material importance to the Company’s
business. From time to time, the Company may become involved in litigation to defend and protect its use and ownership
of its registered marks.
Form 10-K