Jamba Juice 2009 Annual Report Download - page 26

Table of Contents
The inability to fund capital expenditures may adversely impact future growth.
The success of our future growth will depend, to a significant extent, on our ability to fund the necessary capital expenditures. For example, we plan to
build a retail food capability across all four day parts (breakfast, lunch, afternoon and dinner). In addition, two other strategic priorities are to implement
various technology initiatives which would promote efficiency in customer service and to embark on a store refresh program in selected Company Stores to
revitalize their look and feel. To the extent we are not able to fund the necessary capital expenditures to address these priorities, these priorities may take longer
to implement and may not be as successful as we expect, which could have a material adverse impact on our business.
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We may not be able to adequately protect our intellectual property, which could harm the value of our brand and adversely affect our
business.
Our intellectual property is material to the conduct of our business. Our ability to implement our business plan successfully depends in part on our
ability to build further brand recognition using our trademarks, service marks, trade dress and other proprietary intellectual property, including our name and
logos and the unique ambiance of our stores both domestically and overseas. We have secured the ownership and rights to our marks in the United States and
have filed or obtained registrations for restaurant services in most other significant foreign jurisdictions. If our efforts to protect our intellectual property are
inadequate, or if any third party misappropriates or infringes on our intellectual property, either in print or on the internet, the value of our brands may be
harmed, which could have a material adverse effect on our business and might prevent our brands from achieving or maintaining market acceptance. While
we have not encountered claims from prior users of intellectual property relating to restaurant services in areas where we operate or intend to conduct material
operations, there can be no assurances that we will not encounter such claims. If so, this could harm our image, brand or competitive position and cause us to
incur significant penalties and costs.
The Company’s earnings and growth of alternative distribution channels depends in large part on the success of its business partners, and
the Company’s reputation may be harmed by actions taken by third parties.
A strategic priority is to seek opportunities to extend the Jamba brand and maximize revenue by leveraging the brand in new and complementary
consumer packed product categories. These revenues will be dependent on the success of the licensed products, as well as the capability and execution of our
business partner.
For example, in 2008, we launched a line of Jamba Ready-to-Drink beverages under an exclusive worldwide licensing agreement with Nestlé USA. In
December 2008, Nestlé voluntarily suspended production and shipments of the beverages due to production issues. While Nestlé has announced that it is fully
committed to re-assessing its Jamba Ready-to-Drink beverage proposition so that it can come back stronger and positioned for success in the future, there can
be no assurance when and if this may happen.
In the future, we may enter into agreements with other companies for the retail distribution of other product categories involving the licensing of the
Jamba Juice trademarks. Any execution failure by our business partner or failure to adhere to the brand experience and standards expected by our customers
may damage our reputation and brand value, which may potentially affect the results of operations.
The Company’s success depends on the value of the Jamba brand.
The Jamba brand practice is to inspire and simplify healthy living. We believe we must preserve and grow the value of the Jamba brand in order to be
successful in building our business and particularly in building a consumer products growth platform. Brand value is based in part on consumer perceptions
and the Jamba brand has been highly rated in several brand studies. Our brand building initiatives involve increasing our product
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