Pizza Hut 2009 Annual Report Download - page 105

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We may not attain our target development goals.
Our growth strategy depends in large part on our ability to increase our net restaurant count in markets outside the United
States. The successful development of new units will depend in large part on our ability and the ability of our franchisees
to open new restaurants, upgrade existing restaurants, and to operate these restaurants on a profitable basis. We cannot
guarantee that we, or our franchisees, will be able to achieve our expansion goals or that new, upgraded or converted
restaurants will be operated profitably. Further, there is no assurance that any restaurant we open or convert will produce
operating results similar to those of our existing restaurants. Other risks which could impact our ability to increase our net
restaurant count include prevailing economic conditions and our, or our franchisees’, ability to obtain suitable restaurant
locations, obtain required permits and approvals and hire and train qualified personnel.
Our franchisees also frequently depend upon financing from banks and other financial institutions in order to construct
and open new restaurants. Disruptions in credit markets may make financing more difficult or expensive to obtain. If it
becomes more difficult or expensive for our franchisees to obtain financing to develop new restaurants, our planned
growth could slow and our future revenue and cash flows could be adversely impacted.
Our business may be adversely impacted by general economic conditions.
Our results of operations are dependent upon discretionary spending by consumers, which may be affected by general
economic conditions globally or in one or more of the markets we serve. Worldwide economic conditions and consumer
spending have deteriorated and there can be no assurance that consumer spending will return to prior levels. Some of the
factors that are having an impact on discretionary consumer spending include increased unemployment, reductions in
disposable income as a result of equity market declines and declines in residential real estate values, credit availability and
consumer confidence. These and other macroeconomic factors could have an adverse effect on our sales mix, profitability
or development plans, which could harm our financial condition and operating results.
The impact of potentially limited credit availability on third party vendors such as our suppliers cannot be predicted. The
inability of our suppliers to access financing, or the insolvency of suppliers, could lead to disruptions in our supply chain
which could adversely impact our sales and financial condition.
Changes in governmental regulations may adversely affect our business operations.
We and our franchisees are subject to various federal, state and local regulations. Each of our restaurants is subject to
state and local licensing and regulation by health, sanitation, food, workplace safety, fire and other agencies.
Requirements of local authorities with respect to zoning, land use, licensing, permitting and environmental standards
could delay or prevent development of new restaurants in particular locations. In addition, we face risks arising from
compliance with and enforcement of increasingly complex federal and state immigration laws and regulations.
We are subject to the Americans with Disabilities Act and similar state laws that give civil rights protections to
individuals with disabilities in the context of employment, public accommodations and other areas. The expenses
associated with any facilities modifications required by these laws could be material. Our operations are also subject to
the U.S. Fair Labor Standards Act, which governs such matters as minimum wages, overtime and other working
conditions, family leave mandates and a variety of similar state laws that govern these and other employment law matters.
The compliance costs associated with these laws and evolving regulations could be substantial, and any failure or alleged
failure to comply with these laws could lead to litigation, which could adversely affect our financial condition.
Form 10-K