Buffalo Wild Wings 2010 Annual Report Download - page 16

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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, healthcare reform, unemployment tax rates, workers’ compensation
rates, citizenship requirements, union membership, 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, mandated training for employees, 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.
Changes in consumer preferences or discretionary consumer spending could harm our performance.
Our success depends, in part, upon the continued popularity of our Buffalo, New York-style chicken wings, our
boneless wings, other food and beverage items, and appeal of sports bars and casual dining restaurants. We also depend on
trends toward consumers eating away from home. Shifts in these consumer preferences could negatively affect our future
profitability. Such shifts could be based on health concerns related to the cholesterol, carbohydrate, fat, calorie, or salt 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,
which 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 affecting discretionary
consumer spending, including economic conditions, disposable consumer income and consumer confidence. A decline in
consumer spending or in economic conditions could reduce guest traffic or impose practical limits on pricing, either of which
could harm our business, financial condition, operating results or cash flow.
Changes in public health concerns may impact our performance.
Changes in public health concerns may affect consumer preferences for our products. For example, if incidents of the
avian flu occur in the United States, consumer preferences for poultry products may be negatively impacted, resulting in a
decline in demand for our products. Similarly, public health concerns regarding food ingredients, fat and calories have
resulted in governmental regulations that may adversely affect our operations to the extent that such regulations are imposed
in specific locations, rather than nationally or state-wide, or that exceptions to the regulations are given to bars or other
restaurant establishments, giving patrons the ability to choose nearby locations that are not subject to the same regulations.
Further, growing movements to change laws relating to alcohol may result in a decline in alcohol consumption at our
restaurants or increase the number of dram shop claims made against us, either of which may negatively impact operations or
result in the loss of liquor licenses. We are carefully monitoring new laws regulating the preparation and sale of food items
and alcohol.
A regional or global health pandemic could severely affect our business.
A health pandemic is a disease outbreak that spreads rapidly and widely by infection and affects many individuals in an
area or population at the same time. If a regional or global health pandemic were to occur, depending upon its duration and
severity, our business could be severely affected. We have positioned our brand as a place where people can gather together.
Customers might avoid public gathering places in the event of a health pandemic, and local, regional or national governments
might limit or ban public gatherings to halt or delay the spread of disease. A regional or global health pandemic might also
adversely impact our business by disrupting or delaying production and delivery of materials and products in its supply chain
and by causing staffing shortages in our restaurants. The impact of a health pandemic might be disproportionately greater
than on other companies that depend less on the gathering of people together for the sale or use of their products and services.
A decline in visitors to any of the business districts near the locations of our restaurants could negatively affect our
restaurant sales.
Some of our restaurants are located near high activity areas such as retail centers, big box shopping centers and
entertainment centers. We depend on high visitor rates at these businesses to attract guests to our restaurants. If visitors to