Buffalo Wild Wings 2005 Annual Report Download - page 22

o Claims experience for self−insurance programs;
o Increases or decreases in labor or other variable expenses;
o The impact from natural disasters;
o Fluctuations in interest rates; and
o The timing and amount of asset impairment loss and restaurant
closing charges.
As a result of the factors discussed above, our quarterly and annual
operating results may fluctuate significantly. Accordingly, results for any one
quarter are not necessarily indicative of results to be expected for any other
quarter or for any year. In the future, operating results may fall below the
expectations of securities analysts and investors. In that event, the price of
our common stock would likely decrease.
WE MAY NOT BE ABLE TO ATTRACT AND RETAIN QUALIFIED PERSONNEL TO OPERATE
AND MANAGE OUR RESTAURANTS.
Our success and the success of our individual restaurants depends on our
ability to attract, motivate and retain a sufficient number of qualified
restaurant employees, including restaurant managers, kitchen staff and wait
staff. The inability to recruit and retain these individuals may delay the
planned openings of new restaurants or result in high employee turnover in
existing restaurants. This could inhibit our expansion plans and business
performance and, to the extent that a labor shortage may force us to pay higher
wages, harm our profitability. Further, the loss of any of our executive
officers could adversely impact us.
WE MAY NOT BE ABLE TO OBTAIN AND MAINTAIN LICENSES AND PERMITS NECESSARY
TO OPERATE OUR RESTAURANTS.
The restaurant industry is subject to various federal, state and local
government regulations, including those relating to the sale of food and
alcoholic beverages. The failure to obtain and maintain these licenses, permits
and approvals, including food and liquor licenses, could adversely affect our
operating results. Difficulties or failure to obtain the required licenses and
approvals could delay or result in our decision to cancel the opening of new
restaurants. Local authorities may revoke, suspend or deny renewal of our food
and liquor licenses if they determine that our conduct violates applicable
regulations.
CHANGES IN EMPLOYMENT LAWS OR REGULATION COULD HARM OUR PERFORMANCE.
Various federal and state labor laws govern our relationship with our
employees and affect operating costs. These laws include minimum wage
requirements, overtime pay, unemployment tax rates, workers' compensation rates,
citizenship requirements and sales taxes. A number of factors could adversely
affect our operating results, including additional government−imposed increases
in minimum wages, overtime pay, paid leaves of absence and mandated health
benefits, increased tax reporting and tax payment requirements for employees who
receive tips, a reduction in the number of states that allow tips to be credited
toward minimum wage requirements, and increased employee litigation including
claims relating to the Fair Labor Standards Act.
The Americans with Disabilities Act is a federal law that prohibits
discrimination on the basis of disability in public accommodations and
employment. Although our restaurants are designed to be accessible to the
disabled, we could be required to make modifications to our restaurants to
provide service to, or make reasonable accommodations for disabled persons.
WE ARE SUSCEPTIBLE TO ADVERSE TRENDS AND ECONOMIC CONDITIONS IN OHIO.
As of December 25, 2005, 81, or approximately 22%, of our company−owned
and franchised restaurants were located in Ohio. As a result, we are susceptible
to adverse trends and economic conditions in that state. In addition, given our
geographic concentration in the Midwest, negative publicity regarding any of our
restaurants could have a material effect on our business and operations
throughout the region, as could other regional occurrences such as local
strikes, new or revised laws or regulations, or disruptions in the supply of
food products.
CHANGES IN CONSUMER PREFERENCES OR DISCRETIONARY CONSUMER SPENDING COULD
HARM OUR PERFORMANCE.
Our success depends, in part, upon the continued popularity of Buffalo,
New York−style chicken wings, our other menu items, sports bars and casual
dining restaurant styles. We also depend on trends toward consumers eating away
from home more often. Shifts in these consumer preferences could negatively
affect our future profitability. Such shifts could be based on health concerns
related to the cholesterol, carbohydrate or fat content of certain food items,
including items featured on our menu. Negative publicity over the health aspects
of such food items may adversely affect consumer demand for our menu items and
could result in a decrease in guest traffic to our restaurants. A decrease in
guest traffic could materially harm our business. Smoking bans imposed by state
or local laws could also adversely impact our restaurants' performance. In
addition, our success depends to a significant extent on numerous factors