Popeye's 2015 Annual Report Download - page 22

Item 1A. RISK FACTORS
Certain statements we make in this filing, and other written or oral statements made by or on our behalf, may constitute
“forward-looking statements” within the meaning of the federal securities laws. Words or phrases such as “should result,” “are
expected to,” “we anticipate,” “we estimate,” “we project,” “we believe,” or similar expressions are intended to identify
forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to
differ materially from our historical experience and our present expectations or projections. We believe that these forward-
looking statements are reasonable; however, you should not place undue reliance on such statements. Such statements speak
only as of the date they are made, and we undertake no obligation to publicly update or revise any forward-looking statement,
whether as a result of future events, new information or otherwise. The following risk factors and others that we may add from
time to time, are some of the factors that could cause our actual results to differ materially from the expected results described
in our forward-looking statements.
If we are unable to compete successfully against other companies in the QSR industry or develop new products that appeal
to consumer preferences, we could lose customers and our revenues may decline.
The QSR industry is intensely competitive with respect to price, quality, brand recognition, menu offerings, service and
location. If we are unable to compete successfully against other foodservice providers, we could lose customers and our revenues
may decline. We compete against other QSRs, including chicken, hamburger, pizza, and sandwich restaurants, other purveyors
of carry out food, convenience dining establishments and other home meal replacement alternatives, including national restaurant
and grocery store chains. Many of our competitors possess substantially greater financial, marketing, personnel and other
resources than we do. There can be no assurance that consumers will continue to regard our products favorably, that we will be
able to develop new products that appeal to consumer preferences, or that we will be able to continue to compete successfully
in the QSR industry.
Adverse publicity related to food safety and quality could result in a loss of customers and reduce our revenues.
We and our franchisees are, from time to time, the subject of complaints or litigation from guests alleging illness, injury or
other food quality, health or operational concerns. Adverse publicity resulting from these allegations may harm our reputation
or our franchisees’ reputation, regardless of whether the allegations are valid or not, whether we are found liable or not, or
whether those concerns relate only to a single restaurant or a limited number of restaurants or many restaurants. We are also
subject to potentially negative publicity from various sources, including television and social media sites, which are beyond the
control of the Company. Additionally, some animal rights organizations have engaged in confrontational demonstrations at
certain restaurant companies across the country. As a multi-unit restaurant company, we can be adversely affected by the publicity
surrounding allegations involving illness, injury, or other food quality, health or operational concerns. Complaints, litigation or
adverse publicity experienced by one or more of our franchisees could also adversely affect our business as a whole. If we have
adverse publicity due to any of these concerns, we may lose customers and our revenues may decline.
If our franchisees are unable or unwilling to open a sufficient number of restaurants, our growth strategy could be at
risk.
As of December 27, 2015, we franchised 1,900 restaurants domestically and 569 restaurants in Puerto Rico, Guam, the
Cayman Islands and 27 foreign countries. Our growth strategy is significantly dependent on increasing the number of our
franchised restaurants. If our franchisees are unable to open a sufficient number of restaurants, our growth strategy could be
significantly impaired.
Our ability to successfully open additional franchised restaurants will depend on various factors, including the availability
of suitable sites, the negotiation of acceptable leases or purchase terms for new locations, permitting and regulatory compliance,
the ability to meet construction schedules, the financial and other capabilities of our franchisees, and general economic and
business conditions. Many of the foregoing factors are beyond the control of our franchisees. Further, there can be no assurance
that our franchisees will successfully develop or operate their restaurants in a manner consistent with our concepts and standards,
or will have the business abilities or access to financial resources necessary to open the restaurants required by their agreements.
Historically, there have been many instances in which Popeyes franchisees have not fulfilled their obligations under their
development agreements to open new restaurants.
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