Cracker Barrel 2006 Annual Report Download - page 31

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We may not be able to obtain and maintain licenses
and permits necessary to operate our restaurants,
and failure to comply with laws could adversely
affect our operating results.
•
We are subject to a number of risks relating to
federal, state and local governmental regulation
of our business that may increase our costs and
decrease our profit margins.
•
We depend on key personnel for our success.
•
The price and availability of food, ingredients and
utilities used by our restaurants or merchandise
sold in our retail shop could adversely affect our
revenues and results of operations.
•
Our heavy reliance on certain vendors and suppliers
could adversely affect our business.
•
Our current insurance may expose us to unexpected
costs.
•
Health concerns and government regulation relating
to the consumption of beef or other food products
could affect consumer preferences and could nega-
tively impact our results of operations.
•
Unfavorable publicity could harm our business.
•
If we fail to execute our growth strategy, which
primarily depends on our ability to open
new restaurants that are profitable, our business
could suffer.
•
Litigation may adversely affect our business,
financial condition and results of operations.
•
Our annual and quarterly operating results may
fluctuate significantly and could fall below the
expectations of securities analysts and investors
due to a number of factors, some of which are
beyond our control, resulting in a decline in the
price of our securities.
•
Obtaining some of our retail merchandise exposes
us to risks associated with foreign imports.
•
Individual restaurant locations are affected by local
conditions, such as road closures, that could
change and adversely affect the carrying value of
those locations.
•
We can be affected adversely and unexpectedly
by the implementation of new, or changes in the
interpretation of existing, accounting principles
generally accepted in the United States of America.
•
Identification of material weakness in internal
control may adversely affect our financial results.
•
We may need additional capital in the future, and
it may not be available on acceptable terms.
•
Our failure or inability to enforce our trademarks
or other proprietary rights could adversely affect
our competitive position or the value of our brand.
•
Provisions in our charter, Tennessee law and our
shareholder rights plan may discourage potential
acquirors of our company, which could adversely
affect the value of our securities.
RISKS PARTICULAR TO OUR LOGAN’S OPERATIONS
So long as we own Logan’s, that business will
be subject to the following additional risks and
uncertainties:
•Logan’s has developed and tested and is now
implementing an enhanced restaurant prototype for
future expansion, but the prototype has yet to
be proven from either an investment or operating
standpoint.
•Failure to comply with alcoholic beverage or food
control regulations could lead to the loss of Logan’s
liquor and food service licenses and, thereby, harm
Logan’s business.
•“Dram shop” litigation (associated with the sale of
alcoholic beverages) may hurt our Logan’s operations.
•If Logan’s fails to comply with federal and state
statutes, regulations and rules governing our offer
and sale of franchises and our relationship with
our franchisees, we may be subject to franchisee-
initiated litigation and governmental or judicial
fines or sanctions.
•Our Logan’s franchisees could take actions that
could be harmful to our business.
•Our Logan’s development agreements with
our franchisees limit our ability to expand in
certain markets.