Buffalo Wild Wings 2014 Annual Report Download - page 10

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existing FAC members and us. The FAC meets several times per year in person, and more frequently via conference calls, with
our senior leaders. We also have other councils of franchisees with whom we consult periodically on specific matters.
Information Technology
We utilize a standard point-of-sale system in all of our company-owned Buffalo Wild Wings restaurants, which is
integrated to our central offices through a secure, high-speed connection. Visibility to sales, cost of sales, labor and other
operating metrics is provided to company-owned restaurant management through web-based decision support and analysis
tools. Franchisees are required to report sales on a daily basis through an on-line reporting network and submit their restaurant-
level financial statements on a quarterly and annual basis. Our U.S. franchisees are in the process of converting to our point-of-
sale system and we expect they will be fully converted by the end of 2015. Our international franchised restaurants that opened
in Mexico this year also utilize our point-of-sale system and back office tools, allowing their sales information to be
automatically obtained by our central office systems on a daily basis. Our online ordering system allows Guests to place orders
online or through our mobile app. Orders taken online are sent directly to our point-of-sales system and routed to our kitchen
management system based on item cook times and time of customer order pickup. The online ordering system is available for
all company-owned locations and will be fully implemented in all franchised locations by the end of 2015.
Competition
The restaurant industry is intensely competitive. We compete on the basis of the taste, quality and price of food offered,
guest service, ambience, location, and overall Guest experience. We believe that our attractive price-value relationship, the
atmosphere of our restaurants, our sports viewing experience, our focus on our guest and the quality and distinctive flavor of
our food enable us to differentiate ourselves from our competitors. We believe we compete primarily with local and regional
sports bars and national casual dining and quick casual establishments, and to a lesser extent with quick service restaurants
such as wing-based take-out concepts. Many of our direct and indirect competitors are well-established national, regional or
local chains and some have greater financial and marketing resources than we do. We also compete with other restaurant and
retail establishments for site locations and restaurant Team Members.
Proprietary Rights
We own the rights to the “Buffalo Wild Wings®” and “Rusty Taco®” service marks and to certain other service marks
and trademarks used in our system in the U.S., Canada, and other countries where we have restaurants or anticipate opening
restaurants in the future. We attempt to protect our sauce recipes as trade secrets by, among other things, requiring a
confidentiality agreement with our sauce supplier and executive officers. It is possible that competitors could develop recipes
and procedures that duplicate or closely resemble our recipes and procedures. We believe that our trademarks, service marks
and other proprietary rights have significant value and are important to our brand-building efforts and the marketing of our
restaurant concept. We vigorously protect our proprietary rights. We cannot predict, however, whether steps taken by us to
protect our proprietary rights will be adequate to prevent misappropriation of these rights or the use by others of restaurant
features based upon, or otherwise similar to, our concept. It may be difficult for us to prevent others from copying elements of
our concept and any litigation to enforce our rights will likely be costly and may not be successful. Although we believe that we
have sufficient rights to all of our trademarks and service marks, we may face claims of infringement that could interfere with
our ability to market our restaurants and promote our brand. Any such litigation may be costly and divert resources from our
business. Moreover, if we are unable to successfully defend against such claims, we may be prevented from using our
trademarks or service marks in the future and may be liable for damages.
Government Regulation
The restaurant industry is subject to numerous federal, state and local governmental regulations, including those relating
to the preparation and sale of food and alcoholic beverages, sanitation, public health, fire codes, zoning, and building
requirements. Each restaurant requires appropriate licenses from regulatory authorities allowing it to sell liquor, beer and wine,
and each restaurant requires food service licenses from local health authorities. Our licenses to sell alcoholic beverages must be
renewed annually and may be suspended or revoked at any time for cause, including violation by us or our employees of any
law or regulation pertaining to alcoholic beverage control, such as those regulating the minimum age of employees or patrons
who may serve or be served alcoholic beverages, the serving of alcoholic beverages to visibly intoxicated patrons, advertising,
wholesale purchasing and inventory control. In order to reduce this risk, restaurant employees are trained in standardized
operating procedures designed to assure compliance with all applicable codes and regulations. We are also subject to
governmental regulations, such as the Foreign Corrupt Practices Act, that impact the way we do business with our international
franchisees and vendors, and, as we expand into international markets, we may be subject to various foreign regulations. We
have implemented policies, procedures and training to ensure compliance with these regulations.