Papa Johns 2015 Annual Report Download - page 30

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The concentration of stock ownership with Mr. Schnatter may influence the outcome of certain matters
requiring stockholder approval.
The concentration of stock ownership by our Founder, Chairman and Chief Executive Officer allows him
to substantially influence the outcome of certain matters requiring stockholder approval. As of December
27, 2015, he beneficially owned approximately 27% of our outstanding common stock. As a result, he
may be able to substantially influence the strategic direction of the Company and the outcome of matters
requiring approval by our stockholders.
We rely on information technology to operate our businesses and maintain our competitiveness, and any
failure to invest in or adapt to technological developments or industry trends could harm our business.
We rely heavily on information systems, including digital ordering solutions, through which
approximately half of our domestic sales originate. We also rely heavily on point-of-sale processing in
our Company-owned and franchised restaurants for data collection and payment systems for the
collection of cash, credit and debit card transactions, and other processes and procedures. Our ability to
efficiently and effectively manage our business depends on the reliability and capacity of these
technology systems. In addition, we anticipate that consumers will continue to have more options to place
orders digitally, both domestically and internationally. Our failure to adequately invest in new technology,
adapt to technological developments and industry trends, particularly our digital ordering capabilities,
could result in a loss of customers and related market share. Additionally, we are in an environment
where the technology life cycle is short which requires continued reinvestments in technology and
increases the risk that our technology may not be customer centric or could become obsolete, inefficient
or otherwise incompatible with other systems.
We rely heavily on our international franchisees to maintain their own point-of-sale and on line ordering
systems, which are often purchased from third party vendors.
Disruptions of our critical business or information technology systems could harm our ability to compete
and conduct our business.
Our critical business and information technology systems could be damaged or interrupted by power loss,
various technological failures, user errors, sabotage or acts of God. In particular, we may experience
occasional interruptions of our digital ordering solutions, which make online ordering unavailable or slow
to respond, negatively impacting sales and the experience of our customers. If our digital ordering
solutions do not perform with adequate speed, our customers may be less inclined to return to our digital
ordering solutions.
Part of our technology infrastructure, such as our FOCUS point-of-sale system, is specifically designed
for us and our operational systems, which could cause unexpected costs, delays or inefficiencies when
infrastructure upgrades are needed or prolonged and widespread technological difficulties occur.
Significant portions of our technology infrastructure are provided by third parties, and the performance of
these systems is largely beyond our control. Failure of our third-party systems, and backup systems, to
adequately perform, particularly as our online sales grow, could harm our business and the satisfaction of
our customers. In addition, we may not have or be able to obtain adequate protection or insurance to
mitigate the risks of these events or compensate for losses related to these events, which could damage
our business and reputation and be expensive and difficult to remedy or repair.