Papa Johns 2005 Annual Report Download - page 14

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Trademarks
Our rights in our principal trademarks and service marks are a significant part of our business. We are the
owner of the federal registration of the trademark “Papa John’s.” We have also registered “Pizza Papa
John’s and design” (our logo), “Better Ingredients. Better Pizza.” and “Pizza Papa John’s Better
Ingredients. Better Pizza. and design” as trademarks and service marks. We also own federal registrations
for several ancillary marks, principally advertising slogans. We have also applied to register our primary
trademark, “Pizza Papa John’s and design,” in more than 90 foreign countries and the European
Community. We are aware of the use by other persons in certain geographical areas of names and marks
which are the same as or similar to our marks. It is our policy to pursue registration of our marks
whenever possible and to oppose vigorously any infringement of our marks.
Employees
As of December 25, 2005, we employed 13,194 persons, of whom approximately 11,417 were restaurant
team members, 556 were restaurant management and supervisory personnel, 529 were corporate
personnel and 692 were QC Center and support services personnel. Most restaurant team members work
part-time and are paid on an hourly basis. None of our team members is covered by a collective
bargaining agreement. We consider our team member relations to be excellent.
Item 1A. Risk Factors
This Form 10-K contains forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (the “Act”), including information within Management’s Discussion and
Analysis of Financial Condition and Results of Operations. The following cautionary statements are
being made pursuant to the provisions of the Act and with the intention of obtaining the benefits of the
“safe harbor” provisions of the Act. Although we believe that our expectations are based on reasonable
assumptions, actual results may differ materially from those in the forward-looking statements as a result
of various factors, including but not limited to, the following:
1. The ability of the Papa John’s system to continue to open new restaurants is affected by a number of
factors, many of which are beyond our control. These factors include, among other things, litigation,
selection and availability of suitable restaurant locations, increases in or sustained high levels of
food, paper, utilities, fuel, employee compensation and benefits, insurance and similar costs,
negotiation of suitable lease or financing terms, constraints on permitting and construction of
restaurants, higher than anticipated construction costs, and the hiring, training and retention of
management and other personnel. Accordingly, there can be no assurance that system-wide, Papa
John’s will be able to meet planned growth targets, open restaurants in markets now targeted for
expansion, or continue to operate in existing markets profitably.
2. The restaurant industry is intensely competitive with respect to price, service, location and food
quality, and there are many well-established competitors with substantially greater financial and
other resources than the Papa John’s system. Some of these competitors have been in existence for a
substantially longer period than Papa John’s and may be better established in the markets where
restaurants operated by us or our franchisees are, or may be, located. Experience has shown that a
change in the pricing or other marketing or promotional strategies, including new product and
concept developments, of one or more of our major competitors can have an adverse impact on sales
and earnings of Papa John’s and our system-wide restaurant operations.
3. An increase in the cost of cheese or other commodities could adversely affect the profitability of our
system-wide restaurant operations. Cheese costs, historically representing 35% to 40% of our food