Chili's 2004 Annual Report Download - page 39

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candidates; the Company’s ability to achieve projected economic and operating
synergies; unanticipated changes in business and economic conditions affecting
an acquired business; and the ability of the Company to complete divestitures on
acceptable terms and at or near the prices estimated as attainable by the
Company.
If the Company is unable to meet its growth plan, the Company’s profitability
in the future may be adversely affected.
The Company’s ability to meet its growth plan is dependent upon, among other
things, its ability to identify available, suitable and economically viable
locations for new restaurants, obtain all required governmental permits
(including zoning approvals and liquor licenses) on a timely basis, hire all
necessary contractors and subcontractors, and meet construction schedules. The
costs related to restaurant and concept development include purchases and leases
of land, buildings and equipment and facility and equipment maintenance, repair
and replacement. The labor and materials costs involved vary geographically and
are subject to general price increases. As a result, future capital expenditure
costs of restaurant development may increase, reducing profitability. There can
be no assurance that the Company will be able to expand its capacity in
accordance with its growth objectives or that the new restaurants and concepts
opened or acquired will be profitable.
Unfavorable publicity relating to one or more of the Company’s restaurants in
a particular brand may taint public perception of the brand.
Multi-unit restaurant businesses can be adversely affected by publicity
resulting from poor food quality, illness or other health concerns or operating
issues stemming from one or a limited number of restaurants. In particular,
since the Company depends heavily on the “Chili’s” brand for a majority of its
revenues, unfavorable publicity relating to one or more Chili’s restaurants
could have a material adverse effect on the Chili’s brand, and consequently on
the Company’s business, financial condition, and results of operations.
Other risk factors may adversely affect the Company’s financial performance.
Other risk factors that could cause the Company’s actual results to differ
materially from those indicated in the forward-looking statements include,
without limitation, changes in economic conditions, consumer perceptions of food
safety, changes in consumer tastes, governmental monetary policies, changes in
demographic trends, availability of employees, terrorist acts, and weather and
other acts of God.
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