Baskin Robbins 2015 Annual Report Download - page 20

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Additional Information
The Company makes available, free of charge, through its internet website www.dunkinbrands.com, its annual report on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments to those reports filed or
furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as soon as reasonably
practicable after electronically filing such material with the Securities and Exchange Commission. You may read and copy any
materials filed with the Securities and Exchange Commission at the Securities and Exchange Commission’s Public Reference
Room at 100 F Street, NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room
by calling the Securities and Exchange Commission at 1-800-SEC-0330. This information is also available at www.sec.gov.
The reference to these website addresses does not constitute incorporation by reference of the information contained on the
websites and should not be considered part of this document.
Item 1A. Risk Factors.
Risks related to our business and industry
Our financial results are affected by the operating results of our franchisees.
We receive a substantial majority of our revenues in the form of royalties, which are generally based on a percentage of gross
sales at franchised restaurants, rent, and other fees from franchisees. Accordingly, our financial results are to a large extent
dependent upon the operational and financial success of our franchisees. If sales trends or economic conditions worsen for
franchisees, their financial results may deteriorate and our royalty, rent, and other revenues may decline and our accounts
receivable and related allowance for doubtful accounts may increase. In addition, if our franchisees fail to renew their franchise
agreements, our royalty revenues may decrease which in turn may materially and adversely affect our business and operating
results.
Our franchisees could take actions that could harm our business.
Our franchisees are contractually obligated to operate their restaurants in accordance with the operations, safety, and health
standards set forth in our agreements with them. However, franchisees are independent third parties whom we do not control.
The franchisees own, operate, and oversee the daily operations of their restaurants and have sole control over all employee and
other workforce decisions. As a result, the ultimate success and quality of any franchised restaurant rests with the franchisee. If
franchisees do not successfully operate restaurants in a manner consistent with required standards, franchise fees paid to us and
royalty income will be adversely affected and brand image and reputation could be harmed, which in turn could materially and
adversely affect our business and operating results.
Although we believe we generally enjoy a positive working relationship with the vast majority of our franchisees, active and/or
potential disputes with franchisees could damage our brand reputation and/or our relationships with the broader franchisee
group.
Our success depends substantially on the value of our brands.
Our success is dependent in large part upon our ability to maintain and enhance the value of our brands, our customers’
connection to our brands and a positive relationship with our franchisees. Brand value can be severely damaged even by
isolated incidents, particularly if the incidents receive considerable negative publicity or result in litigation. Some of these
incidents may relate to the way we manage our relationship with our franchisees, our growth strategies, our development efforts
in domestic and foreign markets, or the ordinary course of our, or our franchisees’, business. Other incidents may arise from
events that are or may be beyond our ability to control and may damage our brands, such as actions taken (or not taken) by one
or more franchisees or their employees relating to health, safety, welfare, or otherwise; litigation and claims; security breaches
or other fraudulent activities associated with our electronic payment systems; and illegal activity targeted at us or others.
Consumer demand for our products and our brands’ value could diminish significantly if any such incidents or other matters
erode consumer confidence in us or our products, which would likely result in lower sales and, ultimately, lower royalty
income, which in turn could materially and adversely affect our business and operating results.
Incidents involving food-borne illnesses, food tampering, or food contamination involving our brands or our supply chain
could create negative publicity and significantly harm our operating results
While we and our franchisees dedicate substantial resources to food safety matters to enable customers to enjoy safe, quality
food products, food safety events, including instances of food-borne illness (such as salmonella or E. Coli), have occurred in
the food industry in the past, and could occur in the future.