What changed in this filing

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Item 1A. Risk Factors

2021-01-15 compared with 2019-12-20 · 243 added, 165 removed, 422 unchanged (49% of the section changed)

ITEM 1A RISK FACTORS

An investment in our common

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as a result of new information, future events or other developments, except as required by applicable laws and regulations.

The Novel Coronavirus (COVID-19)

Pandemic Has Had A Significant Impact On Our Operations Since March 2020 And Could Materially And Adversely Affect Our Future Business

And Financial Results.

global pandemic caused by the novel coronavirus (COVID-19 virus) has and will continue to materially and adversely affect our restaurant

business for what may be a prolonged period of time.

This damage and disruption has resulted from events and factors that were

impossible for us to predict and are beyond our control.

In the United States, as well as globally, individuals are being encouraged

to practice social distancing, restricted from gathering in groups, and in some areas are restricted from non-essential movements

outside of their homes.

In compliance with government directives from time to time, we temporarily (i) shifted our restaurant

operations to a take-out or delivery only operating model;

(ii) reduced the operating hours of our retail package stores;

laid off a significant number of employees;

and (iv) substantially modified our corporate operations to comply with social distancing

requirements.

As a result, and despite experiencing increased sales and traffic at certain of our retail package liquor stores,

these changes caused by the COVID-19 pandemic materially adversely affected our results of operations for our fiscal year 2020

and will, in all likelihood, impact our results of operations, liquidity and/or financial condition for our fiscal year 2021, particularly

if further government directives are put in place for a significant amount of time.

COVID-19 pandemic’s impact on the economy in general, globally, nationally and locally, could also adversely affect our guests’

financial condition, resulting in reduced spending at our restaurants and package liquor stores.

The COVID-19 pandemic and these

responses have affected and will continue to adversely affect our guest traffic, sales and operating costs and we cannot predict

how long the pandemic will last or what other government responses may occur.

Moreover, once restrictions are lifted, it is unclear

whether guests will be comfortable dining out and, if so, how quickly guests will return to our restaurants, which may be a function

of continued concerns over safety and/or depressed consumer sentiment due to adverse economic conditions, including job losses,

and other factors that are beyond our control.

Any failure of consumers to return to pre-pandemic dining patterns could have a

long-term material adverse impact on us and our future prospects.

equity markets in the United States have been extremely volatile due to the COVID-19 pandemic and our stock price has fluctuated

significantly and may continue to do so.

If the business interruptions caused by COVID-19 continue indefinitely or last longer

than we expect, we may need to seek other sources of liquidity.

The COVID-19 pandemic has created significant disruption and extreme

volatility in global capital markets and is adversely affecting the availability of liquidity generally in the credit markets,

and there can be no guarantee that additional liquidity will be readily available on favorable terms, especially the longer the

COVID-19 pandemic lasts, or available at all.

In the second quarter of fiscal 2020, our Board of Directors voted to cancel a previously

declared cash dividend due to uncertainty surrounding the duration of closures of our dining rooms and other restrictions mandated

by state and local governments in response to COVID-19.

Additionally, certain of our restaurants have been further disrupted when

an employee has been diagnosed with COVID-19 or exposed to a person with a confirmed positive diagnosis of COVID-19.

an employee has been diagnosed with COVID-19, our policy requires quarantine of some or all of a restaurant’s or store’s

employees and disinfection of the restaurant or store facilities.

Additionally, if an employee has direct contact with a friend

or family member with a confirmed positive diagnosis of COVID-19, such employee must exclude himself or herself from work for a

certain period of time.

If a significant percentage of our workforce is unable to work, whether because of illness, quarantine,

limitations on travel or other government restrictions in connection with COVID-19, our operations will be negatively impacted,

potentially materially adversely affecting our liquidity, financial condition or results of operations.

If an outbreak is traced

to one or more of our locations, it could impact our reputation and subject us to legal claims.

have not experienced any significant issues related to suppliers;

however, our suppliers could be adversely impacted by the COVID-19

If our suppliers’

employees are unable to work, whether because of illness, quarantine, limitations on travel or

other government restrictions in connection with COVID-19, or if the supply chain is disrupted for any other reason such as travel

limitations and other restrictions on commerce, we could face shortages of food items or other supplies at our restaurants and

our operations and sales could be adversely impacted by such supply interruptions.

the significant uncertainty as to our ability to increase sales to levels we achieved before the COVID-19 pandemic based on aforementioned

uncertainties and other known and unknown risks related to the pandemic, refer to Part I, Item 1 –

Business, Part II, Item

7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations discussions on Liquidity for further

Additionally, the impact of COVID-19, and the volatile regional and global economic conditions stemming from the pandemic,

may also precipitate or exacerbate other risks discussed in this Item 1A - Risk Factors and elsewhere in this report, any of which

could have a material effect on us.

This situation is changing rapidly and additional effects may arise that we are not presently

aware of or that we currently do not consider to present significant risks to our operations.

If we are not able to respond to

and manage the impact of such events effectively, our business and financial condition will be negatively impacted.

Our Sales and Profit Growth Could

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other things, ongoing consumer and economic uncertainty.

Our ability to

increase comparable restaurant sales depends on many factors, including:

● perceptions

of the Flanigan’s brand;

● competition,

especially from an increasing number of competitors in the fast casual segment of the restaurant industry and from other restaurants

whose strategies overlap ours, as well as from grocery stores, meal kit delivery services and other dining options;

our strategies effectively, including our marketing and branding strategies;

in consumer preferences and discretionary spending;

● our ability

to increase menu prices without adversely affecting our existing business;

natural disasters and other factors limiting access to our restaurants;

in government regulation that may impact customer perceptions of our food.

Our ability to increase

comparable restaurant sales depends on many factors, including:

perceptions of the Flanigan’s brand;

competition, especially from an increasing number of competitors in the fast casual segment of

the restaurant industry and from other restaurants whose strategies overlap ours, as well as from grocery stores, meal kit delivery

services and other dining options;

executing our strategies effectively, including our marketing and branding strategies;

changes in consumer preferences and discretionary spending;

our ability to increase menu prices without adversely affecting our existing business;

weather, natural disasters and other factors limiting access to our restaurants;

changes in government regulation that may impact customer perceptions of our food.

As a result it

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other companies may develop restaurants and/or stores that operate with similar concepts.

Any inability to successfully

compete with the other restaurants and/or stores in our markets will prevent us from increasing or sustaining our revenues and

profitability and will result in a material adverse effect on our business, financial condition, results of operations or cash

Any inability to compete

successfully with the other restaurants and/or stores in our markets will prevent us from increasing or sustaining our revenues

and profitability and will result in a material adverse effect on our business, financial condition, results of operations or cash

We may also need to modify or refine elements of our business to evolve our concepts in order to compete with popular new

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Regulations and

consumer eating habits may change as a result of new information or attitudes regarding diet and health.

consumer eating habits may change because of new information or attitudes regarding diet and health.

These changes may include

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The success of our restaurant

operations is dependent, in part, upon our ability to effectively respond to changes in consumer health and disclosure regulations

operations is dependent, in part, upon our ability to respond effectively to changes in consumer health and disclosure regulations

and to adapt our menu offerings to trends in eating habits.

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About Others Across The Food And Liquor Industry Supply Chain, Whether Or Not Accurate, Could Negatively Affect Us.

Restaurant operators

have received more scrutiny from regulators and health organizations in recent years relating to the health effects of consuming

certain products.

An unfavorable report on the products we use in our menu, the size of our portions or the consumption of those

items could influence the demand for our offerings.

In addition, adverse publicity or news reports, whether or not accurate, of

food quality issues, illness, injury, health concerns, or operating issues stemming from a single restaurant, a limited number

of restaurants, restaurants operated by others or generally in the food supply chain could be damaging to the restaurant industry

overall and specifically harm our reputation.

A decrease in guest traffic as a result of these types of health concerns or negative

publicity could materially harm our results of operations.

Restaurant operators have

received more scrutiny from regulators and health organizations in recent years relating to the health effects of consuming certain

An unfavorable report on the products we use in our menu, the size of our portions or the consumption of those items

could influence the demand for our offerings.

In addition, adverse publicity or news reports, whether or not accurate, of food

quality issues, illness, injury, health concerns, or operating issues stemming from a single restaurant, a limited number of restaurants,

restaurants operated by others or generally in the food supply chain could be damaging to the restaurant industry overall and specifically

harm our reputation.

A decrease in guest traffic because of these types of health concerns or negative publicity could materially

harm our results of operations.

Our Inability To Successfully And Sufficiently

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Affected If We Are Unable To Expand In A Timely And Profitable Manner.

successfully, we must open new restaurants and/or package liquor stores on a timely and profitable basis.

We have experienced

delays in restaurant and/or package liquor store openings from time to time and may experience delays in the future.

our fiscal year 2019, we developed a new package liquor store in Miami, Florida and began developing a new restaurant in

Surise, Florida.

During our fiscal year 2018, we had no new restaurants or package liquor stores under development.

To grow successfully, we

must open new restaurants and/or package liquor stores on a timely and profitable basis.

We have experienced delays in restaurant

and/or package liquor store openings from time to time and may experience delays in the future.

During our fiscal year 2020, we

continued developing our new restaurant in Sunrise, Florida.

During our fiscal year 2019, we developed a new package liquor store

in Miami, Florida (Store #45).

Our ability to open and

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delays and adversely affect the results of one or more restaurants and/or package liquor stores for an indeterminate amount of

If we are unable to successfully manage these risks, we will face increased costs and lower than anticipated revenues which

If we are unable to manage these risks successfully, we will face increased costs and lower than anticipated revenues which

will materially adversely affect our business, financial condition, operating results and cash flow.

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restaurants and package liquor stores are located in South Florida, with the remaining restaurant located in Central Florida.

hurricane season, (June 1 st through November 30 th each year), our restaurants and/or package liquor stores

may face harsh weather associated with hurricanes and tropical storms.

These harsh weather conditions may make it more difficult

for customers to visit our restaurants and package liquor stores, or may necessitate the closure of the stores and restaurants

for a period of time.

If customers are unable to visit our restaurants and/or package liquor stores, our sales and operating results

may be negatively affected.

hurricane season, (June 1 through November 30 each year), our restaurants and/or package liquor stores may face harsh weather associated

with hurricanes and tropical storms.

These harsh weather conditions may make it more difficult for customers to visit our restaurants

and package liquor stores or may necessitate the closure of the stores and restaurants for a period of time.

If customers are unable

to visit our restaurants and/or package liquor stores, our sales and operating results may be negatively affected.

If We Were to Experience Widespread Difficulty

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relating to the development and operation of restaurants.

These regulations include matters relating to:

These regulations include matters relating to the following:

the preparation and sale of food and alcoholic beverages;

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the environment.

Our facilities are licensed

and subject to regulation under state and local fire, health and safety codes.

The construction and remodeling of restaurants will

be subject to compliance with applicable zoning, land use and environmental regulations.

We may not be able to obtain necessary

licenses or other approvals on a cost-effective and timely basis in order to construct and develop restaurants in the future.

facilities are licensed and subject to regulation under state and local fire, health and safety codes.

The construction and remodeling

of restaurants will be subject to compliance with applicable zoning, land use and environmental regulations.

We may not be able

to obtain necessary licenses or other approvals on a cost-effective and timely basis in order to construct and develop restaurants

in the future.

Various federal and state

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could negatively impact public perception of our brands.

We are required to comply

with the alcohol licensing requirements of the federal government, states and municipalities where our restaurants are located.

Alcoholic beverage control regulations require applications to state authorities and, in certain locations, county and municipal

authorities for a license and permit to sell alcoholic beverages.

Typically, licenses must be renewed annually and may be revoked

or suspended for cause at any time.

Alcoholic beverage control regulations relate to numerous aspects of the daily operations of

the restaurants, including minimum age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory

We are required

to comply with the alcohol licensing requirements of the federal government, states and municipalities where our restaurants are

Alcoholic beverage control regulations require applications to state authorities and, in certain locations, county and

municipal authorities for a license and permit to sell alcoholic beverages.

Typically, licenses must be renewed annually and may

be revoked or suspended for cause at any time.

Alcoholic beverage control regulations relate to numerous aspects of the daily operations

of the restaurants, including minimum age of guests and employees, hours of operation, advertising, wholesale purchasing, inventory

control and handling and storage and dispensing of alcoholic beverages.

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our licenses may be revoked and we may be forced to terminate the sale of alcoholic beverages at one or more of our restaurants.

The Federal Americans with

Disabilities Act (the “ADA”) prohibits discrimination on the basis of disability in public accommodations and employment.

We are required to comply with the ADA and regulations relating to accommodating the needs of disabled persons in connection with

the construction of new facilities and with significant renovations of existing facilities.

Failure to comply with

these and other regulations could negatively impact our reputation and could have an adverse effect on our business, financial

The Federal Americans

with Disabilities Act (the “ADA”) prohibits discrimination on the basis of disability in public accommodations and

We are required to comply with the ADA and regulations relating to accommodating the needs of disabled persons in connection

with the construction of new facilities and with significant renovations of existing facilities.

Failure to comply

with these and other regulations could negatively impact our reputation and could have an adverse effect on our business, financial

condition, results of operations or cash flows.

We May Face Liability Under Dram Shop

We May Face Liability Under Dram

Shop Statutes.

Our sale of alcoholic

beverages subjects us to “dram shop”

These statutes allow an injured person to recover damages from an establishment

statutes, which allow an injured person to recover damages from an establishment

that served alcoholic beverages to an intoxicated person.

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and adversely affected.

We currently have one “dram shop”

claim, which we are defending vigorously.

There are currently no “dram shop”

claims pending against us.

See “Item 1.

Business—Government Regulation”

Business—Government

Regulation”

for a discussion of the regulations with which we must comply.

We May Face Instances Of Food Borne Illness

We May Face Instances of Food

Borne Illness.

In years past, several

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We use a variety of applications

and systems to securely manage the flow of information within each of our restaurants and within our centralized corporate infrastructure.

and systems to manage the flow of information securely within each of our restaurants and within our centralized corporate infrastructure.

The services available within our systems and applications include restaurant and store operations, supply chain, inventory, scheduling,

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monitor operating results.

Our ability to efficiently and effectively manage our business depends significantly on the reliability

Our ability to manage efficiently and effectively our business depends significantly on the reliability

and capacity of these and other systems and our operations depend substantially on the availability of our point-of-sale system

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Healthcare Laws May Increase Our Healthcare Costs and Negatively Impact Our Financial Results.

offer eligible full-time employees the opportunity to enroll in healthcare coverage subsidized by the Company.

For various reasons,

many of our eligible employees currently choose not to participate in our healthcare plans.

We offer eligible

full-time employees the opportunity to enroll in healthcare coverage subsidized by the Company.

For various reasons, many of our

eligible employees currently choose not to participate in our healthcare plans.

However, under the comprehensive U.S.

health care reform law enacted in 2010, the Affordable Care Act, certain provisions, including, the employer mandate, may increase

our labor costs significantly.

In general, implementing the requirements of the Affordable Care Act is likely to impose additional

administrative costs on us.

The costs and other effects of these new healthcare requirements cannot be determined with certainty,

but they may have a material adverse effect on our financial and operating results.

Governmental Regulation in One or More

of the Following Areas May Adversely Affect Our Existing and Future Operations and Results, Including by Harming Our Ability to

Open New Restaurants or Increasing Our Operating Costs.

reform law enacted in 2010, the Affordable Care Act, certain provisions, including, the employer mandate, may increase our labor

costs significantly.

In general, implementing the requirements of the Affordable Care Act is likely to impose additional administrative

The costs and other effects of these new healthcare requirements cannot be determined with certainty, but they may

have a material adverse effect on our financial and operating results.

Governmental Regulation in One

or More of the Following Areas May Adversely Affect Our Existing and Future Operations and Results, Including by Harming Our Ability

to Open New Restaurants or Increasing Our Operating Costs.

and Immigration Regulations

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employee culture.

Americans with Disabilities

Act and Similar State Laws

with Disabilities Act and Similar State Laws

are subject to the U.S.

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resolving claims under the ADA or similar state laws, could be material.

Nutrition and Food

and Food Regulation

recent years there has been an increased legislative, regulatory and consumer focus at the federal, state and municipal levels

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as they select their food and beverage choices decreasing our throughput.

These initiatives may also change customer buying habits

in a way that adversely impacts our sales.

These initiatives may also change customers’

habits in a way that adversely impacts our sales.

Privacy/Cybersecurity

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keep qualified employees.

Local Licensure,

Zoning and Other Regulation

Licensure, Zoning and Other Regulation

of our restaurants is also subject to state and local licensing and regulation by health, alcoholic beverage, sanitation, food

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in particular locations.

Environmental Laws

Environmental

are subject to federal, state and local environmental laws and regulations concerning the discharge, storage, handling, release

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that we may need to make to comply with or to satisfy claims relating to environmental laws.

We Could Be Party To Litigation That

Could Adversely Affect Us By Distracting Management, Increasing Our Expenses or Subjecting Us to Material Money Damages and Other

We could be party to litigation

that could adversely affect us by distracting management, increasing our expenses or subjecting us to material money damages and

other remedies.

We could become subject

to numerous claims alleging violations of federal and state laws regarding workplace and employment matters, including wages, work

hours, overtime, vacation and family leave, discrimination, wrongful termination and similar matters, and we could become subject

to class action or other lawsuits related to these or different matters.

Our customers could file complaints or lawsuits against

us alleging that we are responsible for some illness or injury they suffered at or after a visit to our restaurants or that we

have problems with food quality, operations or our food related disclosure or advertising practices.

The restaurant industry has

been subject to a growing number of claims based on the nutritional content of food products sold and disclosure and advertising

Regardless of whether any

claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend and may divert

time and money away from our operations and hurt our performance.

A significant judgment for any claims against us could materially

and adversely affect our financial condition or results of operations.

Any adverse publicity resulting from these allegations,

whether directed at us or at fast casual or quick-service restaurants generally, may also materially and adversely affect our reputation

or prospects, which in turn could adversely affect our results.

Success May Depend on the Continued Service and Availability of Key Personnel.

and Chief Executive Officer and President, James Flanigan, has been the principal architect of our business strategy since 2002.

August Bucci and Jeffrey Kastner, our Chief Operating Officer and Chief Financial Officer, respectively, have also served with

us since 2002 in the case of Mr.

Be Party To Litigation That Could Adversely Affect Us By Distracting Management, Increasing Our Expenses or Subjecting Us to Material

Money Damages and Other Remedies.

could be party to litigation that could adversely affect us by distracting management, increasing our expenses or subjecting us

to material money damages and other remedies.

We could become subject to numerous claims alleging violations of federal and state

laws regarding workplace and employment matters, including wages, work hours, overtime, vacation and family leave, discrimination,

wrongful termination and similar matters, and we could become subject to class action or other lawsuits related to these or different

Our customers could file complaints or lawsuits against us alleging that we are responsible for some illness or injury

they suffered at or after a visit to our restaurants or that we have problems with food quality, operations or our food related

disclosure or advertising practices.

The restaurant industry has been subject to a growing number of claims based on the nutritional

content of food products sold and disclosure and advertising practices.

of whether any claims against us are valid or whether we are ultimately held liable for such claims, they may be expensive to defend

and may divert time and money away from our operations and hurt our performance.

A significant judgment for any claims against

us could materially and adversely affect our financial condition or results of operations.

Any adverse publicity resulting from

these allegations, whether directed at us or at fast casual or quick-service restaurants generally, may also materially and adversely

affect our reputation or prospects, which in turn could adversely affect our results.

May Depend on the Continued Service and Availability of Key Personnel.

Chairman and Chief Executive Officer and President, James Flanigan, has been the principal architect of our business strategy since

August Bucci and Jeffrey Kastner, our Chief Operating Officer and Chief Financial Officer, respectively, have also served

with us since 2002 in the case of Mr.

Bucci and since 2004 in the case of Mr.

Kastner, and much of our growth has occurred under their

direction as well.

We believe our executive officers have created an employee culture, food culture and business strategy at our

company that has been critical to our success and that may be difficult to replicate under another management team.

We also believe

that it may be difficult to locate and retain executive officers who are able to grasp and implement our unique strategic vision.

Kastner, and much of our growth has occurred under

their direction as well.

We believe our executive officers have created an employee culture, food culture and business strategy

at our company that has been critical to our success and that may be difficult to replicate under another management team.

believe that it may be difficult to locate and retain executive officers who are able to grasp and implement our unique strategic

If our company culture were to deteriorate following a change in leadership, or if a new management team were to be unsuccessful

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results may be adversely impacted.

are Exposed to Risks Related to Cybersecurity.

Exposed to Risks Related to Cybersecurity.

we maintain systems and processes that are designed to protect the security of our computer systems, software, networks and other

technology, there is no assurance that all of our security measures will provide absolute security.

Any material incidents

could cause us to experience financial losses that are either not insured against or not fully covered through any insurance maintained

Any material incidents could

cause us to experience financial losses that are either not insured against or not fully covered through any insurance maintained

by us and increased expenses related to addressing or mitigating the risks associated with any such material incidents.

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and our Systems may be Inadequate to Support our Future Growth Strategies.

We rely heavily on information

technology systems in all aspects of our operations including our restaurant point-of sale systems, financial systems, marketing

programs, employee engagement, supply chain management, cyber-security, and various other processes and transactions.

to effectively manage and run our business depends on the reliability and capacity of our information technology systems, including

technology services and systems for which we contract from third parties.

These systems and services may be insufficient to effectively

manage and run our business.

These systems and our business needs will continue to evolve and require upgrading and maintenance

over time, consequently requiring significant future commitments of resources and capital.

Moreover, these technology

services and systems, communication systems, and electronic data could be subject or vulnerable to damage or interruption from

hurricanes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, loss of data, data breaches,

or other attempts to harm our systems.

A failure of these systems to operate effectively, problems with transitioning to upgraded

or replacement systems, or any other failure to maintain a continuous and secure information technology network for any of the

above reasons could result in interruption and delays in customer services, adversely affect our reputation, and negatively impact

our results of operations.

rely heavily on information technology systems in all aspects of our operations including our restaurant point-of sale systems,

financial systems, marketing programs, employee engagement, supply chain management, cyber-security, and various other processes

and transactions.

Our ability to effectively manage and run our business depends on the reliability and capacity of our information

technology systems, including technology services and systems for which we contract from third parties.

These systems and services

may be insufficient to effectively manage and run our business.

These systems and our business needs will continue to evolve and

require upgrading and maintenance over time, consequently requiring significant future commitments of resources and capital.

these technology services and systems, communication systems, and electronic data could be subject or vulnerable to damage or interruption

from hurricanes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, loss of data, data

breaches, or other attempts to harm our systems.

A failure of these systems to operate effectively, problems with transitioning

to upgraded or replacement systems, or any other failure to maintain a continuous and secure information technology network for

any of the above reasons could result in interruption and delays in customer services, adversely affect our reputation, and negatively

impact our results of operations.

of Violence at or Threatened Against our Restaurants or the Centers in which they are Located, including Active Shooter Situations

and Terrorism, Could Unfavorably Impact our Restaurant Sales, which could Materially Adversely Affect our Financial Performance.

Any act of violence at

or threatened against our restaurants or the centers in which they are located, including active shooter situations and terrorist

activities, may result in restricted access to our restaurants and/or restaurant closures in the short-term and, in the long-term,

may cause our customers and staff to avoid our restaurants.

Any such situation could adversely impact customer traffic and make

it more difficult to fully staff our restaurants, which could materially adversely affect our financial performance.

The occurrence or threat

of extraordinary events, including active shooter or future terrorist attacks and military and governmental responses and the protest

of future wars, may result in negative changes to economic conditions likely resulting in decreased consumer spending.

Additionally,

decreases in consumer discretionary spending may impact the frequency with which our customers choose to dine out at restaurants

or the amount they spend on meals while dining out at restaurants, thereby adversely affecting our sales and results of operations.

A decrease in consumer discretionary spending may also adversely affect our ability to achieve the benefit of planned menu price

increases to help preserve our operating margins.

act of violence at or threatened against our restaurants or the centers in which they are located, including active shooter situations

and terrorist activities, may result in restricted access to our restaurants and/or restaurant closures in the short-term and,

in the long-term, may cause our customers and staff to avoid our restaurants.

Any such situation could adversely impact customer

traffic and make it more difficult to staff our restaurants fully, which could materially adversely affect our financial performance.

occurrence or threat of extraordinary events, such as active shooter or future terrorist attacks military and governmental responses,

and the protest of future wars, may result in negative changes to economic conditions likely resulting in decreased consumer spending.

Additionally, decreases in consumer discretionary spending may impact the frequency with which our customers choose to dine out

at restaurants or the amount they spend on meals while dining out at restaurants, thereby adversely affecting our sales and results

of operations.

A decrease in consumer discretionary spending may also adversely affect our ability to achieve the benefit of planned

menu price increases to help preserve our operating margins.

Media Impact on Customer Perceptions of our Brand.

The considerable expansion

in the use of social media over recent years can further amplify any negative publicity that may be generated.

The adverse impact

of publicity on customers’

considerable expansion in the use of social media over recent years can further amplify any negative publicity that may be generated.

The adverse impact of publicity on customers’

perception of us could have a further negative impact on our sales.

If the impact of any such

publicity is particularly long-lasting, the value of our brand may suffer and our ability to grow could be diminished.

impact of any such publicity is particularly long-lasting, the value of our brand may suffer and our ability to grow could be diminished.

digital business, which has become an increasing significant part of our business, is subject to risks.

due to the COVID-19 pandemic, our revenue derived from digital orders, which includes delivery and customer pickup has increased

substantially.

While we are uncertain as to whether this business will continue to increase and/or be significant, we have implemented

technology, targeted advertising and promotions and to some extent remodeled our restaurants, to accommodate the growth of our

digital business.

If we do not continue to grow our digital business, it may be difficult for us to recoup these costs or achieve

our sales growth potential.

We rely on third-party delivery services to fulfill package store delivery orders, and the ordering

and payment platforms used by these third-parties, or online ordering system, could be interrupted by technological failures, user

errors, cyber-attacks or other factors, which could adversely impact sales through these channels and negatively impact our reputation.

Additionally, our delivery partners are responsible for order fulfillment and errors or failures to make timely deliveries could

cause guests to stop ordering from us.

The third-party delivery business is competitive, with a number of players competing for

market share and delivery drivers.

If the third-party delivery services that we utilize cease or curtail operations, increase

their fees, or give greater priority or promotions on their platforms to our competitors, our delivery business and our sales may

be negatively impacted.

UNRESOLVED STAFF COMMENTS

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors