Buffalo Wild Wings 2014 Annual Report Download - page 14

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• Competition in new and existing markets;
• General economic conditions.
A security failure in our information technology systems could expose us to potential liability and loss of revenues.
We accept credit and debit card payments in our restaurants. A number of retailers have recently experienced actual or
potential security breaches in which credit and debit card information may have been stolen, including a number of highly
publicized incidents with well-known retailers. The intentional, inadvertent or negligent release or disclosure of data by our
company or our service providers could result in theft, loss, fraudulent or unlawful use of customer data could harm our
reputation and result in remedial and other costs, fines or lawsuits.
We are required to maintain the highest level of Payment Card Industry (“PCI”) Data Security Standard compliance at
our company-owned restaurants and corporate offices due to the number of credit card transactions processed in our company-
owned restaurants. Failure to maintain our PCI compliance could result in fines or even prohibit our use of payment cards in
our company-owned restaurants. While our franchisees are separate businesses, and therefore are subject to different levels of
PCI compliance, any failure by our franchisees to maintain their required level of PCI compliance could harm our reputation or
result in loss of future royalties.
Shortages or interruptions in the availability and delivery of food and other supplies may increase costs or reduce
revenues.
Possible shortages or interruptions in the supply of food items and other supplies to our restaurants caused by inclement
weather, terrorist attacks, natural disasters such as floods, drought and hurricanes, pandemics, the inability of our vendors to
obtain credit in a tightened credit market, food safety warnings or advisories or the prospect of such pronouncements, or other
conditions beyond our control could adversely affect the availability, quality and cost of items we buy and the operations of our
restaurants. Our inability to effectively manage supply chain risk could increase our costs and limit the availability of products
critical to our restaurant operations.
Our restaurants may not achieve market acceptance in the new domestic and international geographic regions we enter.
Our expansion plans depend on opening restaurants in new domestic and international markets where we or our
franchisees have little or no operating experience. We may not be successful in operating our restaurants in new markets on a
profitable basis. The success of these new restaurants will be affected by the different competitive conditions, consumer tastes,
and discretionary spending patterns of the new markets as well as our ability to generate market awareness of our brands. Sales
at restaurants opening in new markets may take longer to reach profitable levels, if at all.
New restaurants added to our existing markets may take sales from existing restaurants.
We and our franchisees intend to open new restaurants in our existing markets, which may reduce sales performance and
guest visits for existing restaurants in those markets. In addition, new restaurants added in existing markets may not achieve
sales and operating performance at the same level as established restaurants in the market.
Investments in new or emerging brands may not be successful.
We have a minority investment in Pie Squared Holdings, operator and franchisor of PizzaRev, a fast-casual pizza
restaurant, and a majority investment in Rusty Taco, a fast-casual restaurant specializing in street-style tacos, and intend to
invest in these and additional emerging restaurant brands in the future as additional vehicles of growth. If an emerging brand
does not succeed, we risk losing all or a substantial portion of our investment in that brand. In addition, our overall long-term
growth may be affected by the level of success achieved by these restaurant concepts.
Unfavorable publicity could harm our business.
Multi-unit restaurant businesses such as ours can be adversely affected by publicity resulting from complaints or
litigation or general publicity regarding poor food quality, food-borne illness, personal injury, food tampering, adverse health
effects of consumption of various food products or high-calorie foods (including obesity), or other concerns. Negative publicity
from traditional media or on-line social network postings may also result from actual or alleged incidents or events taking place
in our restaurants. Regardless of whether the allegations or complaints are valid, unfavorable publicity relating to a number of
our restaurants, or only to a single restaurant, could adversely affect public perception of the entire brand. Adverse publicity