Popeye's 2015 Annual Report Download - page 23

Changes in consumer preferences and demographic trends could result in a loss of customers and reduce our revenues.
Food service businesses are often affected by changes in consumer tastes, national, regional and local economic conditions,
discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing restaurants.
In addition, the restaurant industry is currently under heightened legal and legislative scrutiny related to menu labeling and
resulting from the perception that the practices of restaurant companies have contributed to nutritional, caloric intake, obesity,
or other health concerns of their guests. If we are unable to adapt to changes in consumer preferences and trends, we may lose
customers and our revenues may decline.
Because our operating results are closely tied to the success of our franchisees, the failure or loss of one or more franchisees,
operating a significant number of restaurants, could adversely affect our operating results.
Our operating results are dependent on our franchisees and, in some cases, on certain franchisees that operate a large number
of restaurants. How well our franchisees operate their restaurants and their desire to maintain their franchise relationship with
us is outside of our direct control. In addition, economic conditions and the availability of credit may have an adverse impact
on our franchisees. Any failure of these franchisees to operate their restaurants successfully or the loss of these franchisees could
adversely impact our operating results. As of December 27, 2015, we had 360 franchisees operating restaurants within the
Popeyes system and several preparing to become franchisee operators. The largest of our domestic franchisees operates 143
Popeyes restaurants; and the largest of our international franchisees operates 144 Popeyes restaurants. Typically, each of our
international franchisees is responsible for the development of significantly more restaurants than our domestic franchisees. As
a result, our international operations are more closely tied to the success of a smaller number of franchisees than our domestic
operations. There can be no assurance that our domestic and international franchisees will operate their franchises successfully
or continue to maintain their franchise relationships with us.
Our operating results and same-store sales may fluctuate significantly and could fall below the expectations of securities
analysts and investors, which could cause the market price of our common stock to decline.
Our operating results and same-store sales have fluctuated significantly in the past and may fluctuate significantly in the
future as a result of a variety of factors, many of which are outside of our control. If our operating results or same-store sales
fluctuate or fall below the expectations of securities analysts and investors, the market price of our common stock could decline.
Factors that may cause our results or same-store sales to fluctuate include the following:
• the opening of new restaurants by us or our franchisees;
• the closing of restaurants by us or our franchisees;
• increases in the number of restaurant properties leased or sub-leased to franchisees under percentage rent
arrangements;
• volatility of gasoline prices;
• increases in labor costs;
• increases in the cost of commodities and paper products;
• inclement weather patterns;
• economic conditions generally, and in each of the markets in which we, or our franchisees, are located; and
• the change in competitive factors.
Accordingly, results for any one period are not indicative of the results to be expected for any other period or for the full year,
and same-store sales for any future period may decrease.
We are subject to government regulation, and our failure to comply with existing regulations or increased regulations could
adversely affect our business and operating results.
We are subject to numerous federal, state, local and foreign government laws and regulations, including those relating to:
• minimum wage, overtime, immigration, unions and other labor issues;
• franchising and joint employer liability;
• the preparation and sale of food;
• employee healthcare legislation;
• building and zoning requirements;
• environmental protection;
• information security and data protection;
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