Papa Johns 2003 Annual Report Download - page 15

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14
significantly as a result of increased claims costs. The captive’s relatively immature claims history
limits the predictive value of estimating the costs of incurred and future claims. Accordingly, the
captive could continue to incur significant fluctuations in financial results as the captive provides
insurance coverage to domestic franchisees.
10. Our domestic and international operations could be negatively impacted by significant changes in
international economic and political conditions. In addition, our international operations are subject
to additional factors, including currency regulations and fluctuations, cultures and consumer
preferences, diverse government regulations and structures, availability and cost of land and
construction, ability to source ingredients and other commodities in a cost-effective manner, and
differing interpretation of the obligations established in franchise agreements with international
franchisees. Accordingly, there can be no assurance that our operations will achieve or maintain
profitability or meet planned growth rates.
11. Our planned conversion of a majority of Perfect Pizza restaurants to Papa John’s restaurants
represents the first time we have attempted to expand the Papa John’s brand in this manner. There
can be no assurance that all conversion issues will be identified and successfully addressed in a
timely, cost-effective manner or that the existing Perfect Pizza market share can be successfully
converted to Papa John’s.