What changed in this filing

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Item 1A. Risk Factors

2023-01-18 compared with 2022-01-14 · 105 added, 63 removed, 595 unchanged (22% of the section changed)

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except as required by applicable laws and regulations.

Risks Related

to COVID-19 Pandemic

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

Related to COVID-19 Pandemic

The 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.

In March 2020, a novel strain

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Throughout our fiscal year 2022, in accordance with guidance from health officials, we

offered both indoor and outdoor food and bar options at all of our restaurants, with, among other precautions, appropriate social distancing

and mask requirements for all customers and employees.

offered both indoor and outdoor food and bar options at all of our restaurants.

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

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will last or what other government responses may occur.

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.

our fiscal year 2021, our Board of Directors did not declare a cash dividend due to uncertainty surrounding the duration of restrictions

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

not experienced any significant issues related to suppliers;

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

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.

fiscal year 2022, our Board of Directors declared a cash dividend of $1.00 per share to shareholders of record on March 31, 2022, payable

on April 19, 2022.

During our fiscal year 2021, our Board of Directors did not declare a cash dividend due to uncertainty surrounding

the duration of restrictions mandated by state and local governments in response to COVID-19.

experienced significant issues relating to suppliers and labor impacted by the COVID-19 pandemic.

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.

of COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, may also precipitate or exacerbate other

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financial condition will be negatively impacted.

Risks Related

to Our Business

Related to Our Business

If we are unable to

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tip credit wage) and require significantly more mandated benefits than what is currently required under federal law.

In addition to increasing

the overall wages paid to our minimum wage and tip credit wage earners, these increases create pressure to increase wages and other benefits

paid to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar considerations, historically

received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage.

Because we employ a large workforce, any wage

increase and/or expansion of benefits mandates will have a particularly significant impact on our labor costs.

Our vendors, contractors

and business partners are similarly impacted by wage and benefit cost inflation, and many have or will increase their price for goods,

construction and services in order to offset their increasing labor costs.

The State of Florida

has already enacted a minimum wage and tip credit, with the minimum wage currently at $11.00 per hour and a tip credit of $3.02 per hour.

The minimum wage increases $1.00 per hour annually until it reaches $15.00 per hour in 2027.

The tip credit does not increase.

to increasing the overall wages paid to our minimum wage and tip credit wage earners, these increases create pressure to increase wages

and other benefits paid to other staff members who, in recognition of their tenure, performance, job responsibilities and other similar

considerations, historically received a rate of pay exceeding the applicable minimum wage or minimum tip credit wage.

Because we employ

a large workforce, any wage increase and/or expansion of benefits mandates will have a particularly significant impact on our labor costs.

Our vendors, contractors and business partners are similarly impacted by wage and benefit cost inflation, and many have or will increase

their price for goods, construction and services in order to offset their increasing labor costs.

Additionally, while our employees are

not currently covered by any collective bargaining agreements, union organizers may engage in efforts to organize our employees and those

of other restaurant companies.

If a significant portion of our employees were to unionize, our labor costs could increase and it could

negatively impact our culture, reduce our flexibility and disrupt our business.

In addition, our responses to any union organizing efforts

could negatively impact our reputation and dissuade guests from patronizing our restaurants.

labor expenses include significant costs related to our health benefit plans.

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Increases in Food Costs, Raw Materials and Other

Supplies and Services May Have a Material Adverse Impact on our Financial Performance.

Supplies and Services Due to Inflation May Have a Material Adverse Impact on our Financial Performance.

Our operating margins depend on,

among other things, our ability to anticipate and react to changes in the costs of key operating resources, including food and beverage

costs, utilities and other supplies and services.

We attempt to negotiate short-term and long-term agreements for our principal commodity,

supply and equipment requirements, depending on market conditions and expected demand.

However, we are currently unable to contract for

extended periods of time for certain of our commodities.

Consequently, these commodities can be subject to unforeseen supply and cost

fluctuations due to factors such as changes in demand patterns, increases in the cost of key inputs, fuel costs, weather and other market

conditions outside of our control.

costs, utilities and other supplies and services due to inflation.

We attempt to negotiate short-term and long-term agreements for our

principal commodity, supply and equipment requirements, depending on market conditions and expected demand.

However, we are currently

unable to contract for extended periods of time for certain of our commodities.

Consequently, these commodities can be subject to unforeseen

supply and cost fluctuations due to factors such as changes in demand patterns, increases in the cost of key inputs, fuel costs, weather

and other market conditions outside of our control caused by inflation.

Dairy costs can also fluctuate due to government regulation.

Our suppliers also may be affected by

higher costs to produce and transport commodities used in our restaurants, higher minimum wage and benefit costs, and other expenses that

they pass through to their customers, which could result in higher costs for goods and services supplied to us.

suppliers also may be affected by higher costs to produce and transport commodities used in our restaurants, higher minimum wage and benefit

costs, and other expenses that they pass through to their customers, which could result in higher costs for goods and services supplied

Shortages or Interruptions in the Supply

of Food Offering Ingredients and/or Liquor Inventory Could Adversely Affect our Operating Results.

business is dependent on frequent and consistent deliveries of food offering ingredients and liquor inventory.

We may experience shortages,

delays or interruptions in the supply of ingredients and other supplies to our restaurants due to inclement weather, natural disasters,

labor issues or other operational disruptions at our suppliers, distributors or transportation providers or other conditions beyond our

In addition, we have a single or a limited number of suppliers for some of our ingredients, including baby back ribs.

we believe we have potential alternative suppliers and sufficient reserves of food offering ingredients and liquor inventory, shortages

or interruptions in our supply of food offering ingredients and liquor inventory could adversely affect our financial results.

Our Business Could Be Materially Adversely Affected

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

During our fiscal year 2021, we continued developing

our new restaurants in Sunrise, Florida (Store #85) and Miramar, Florida (Store #25).

During our fiscal year 2021, we also continued developing

our new package liquor store in Miramar, Florida (Store #24).

During our fiscal year 2022, we opened our new limited

partnership owned restaurant in Sunrise, Florida (Store #85) for business and continued developing our new limited partnership owned restaurant

in Miramar, Florida (Store #25), which we anticipate opening for business in February 2023.

During our fiscal year 2022, we also continued

developing our new package liquor store in Miramar, Florida (Store #24).

Our ability to open and profitably

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could result in higher labor costs.

Increases In Employee Minimum Wages By The Federal

Or State Government Could Adversely Affect Business.

Certain of our Company employees

are paid wages that relate to federal and state minimum wage rates.

Increases in the minimum wage rates, such as fixed annual increases

in the State of Florida minimum wage, may significantly increase our labor costs.

In addition, since our business is labor-intensive,

shortages in the labor pool or other inflationary pressure could increase labor costs, which could harm our financial performance.

Due To Our Geographic Locations, Restaurants

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

Hurricane Ian, which struck the Southwest Coast

of Florida on September 28, 2022 did not impact any of the Company’s locations.

If We Were to Experience Widespread Difficulty

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upon our financial condition and/or results of operations.

We secured windstorm insurance coverage for the period commencing December

30, 2022 at a higher premium.

Subsequent Events for a discussion of windstorm insurance for the period commencing December

30, 2022 on page 38.)

Our Inability or Failure

to Execute a Comprehensive Business Continuity Plan at our Restaurant Support Centers Following a Disaster or Force Majeure Event could

have a Material Adverse Impact on our Business.

of our corporate systems and processes and corporate support for our restaurant and package liquor store operations are centralized at

one location.

We have disaster recovery procedures and business continuity plans in place to address crisis-level events, including

hurricanes and other natural disasters and back up and off-site locations for recovery of electronic and other forms of data and information

and the COVID-19 pandemic has provided a limited test of our ability to manage our business remotely.

However, if we are unable to fully

implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness

in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and

operating procedures that could have a material adverse effect on our financial condition, results of operation and exposure to administrative

and other legal claims.

In addition, these threats are constantly evolving, which increases the difficulty of accurately and timely predicting,

planning for and protecting against the threat.

As a result, our disaster recovery procedures and business continuity plans security may

not adequately address all threats we face or protect us from loss.

Inability To Attract And Retain Customers Could

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the environment.

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.

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.

Various federal and state labor

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supply chain or cause us to be the target of litigation, which could materially adversely affect our financial performance.

COVID-19 pandemic has had a significant adverse impact on our customer traffic and ability to operate our restaurants and may continue

to do so for the foreseeable future.

COVID-19 pandemic had a significant adverse impact on our customer traffic and ability to operate our restaurants and may do so again

in the foreseeable future.

Future pandemics and other diseases may have a similar or more severe impact.

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our operations and any resulting negative publicity could significantly harm our reputation.

We have not experienced any security breaches

If We Experience a Significant Failure in or

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In addition, stringent and varied requirements of local regulators with respect

to zoning, and use and environmental factors could delay or prevent development of new restaurants in particular locations.

to zoning, use and environmental factors could delay or prevent development of new restaurants in particular locations.

Environmental

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our delivery business and our sales may be negatively impacted

institutional lender will no longer originate, renew or modify loans at LIBOR effective January 1, 2022.

January 1, 2022, our institutional lender will no longer originate, renew or modify loans at LIBOR, except in limited situations.

limited exceptions include our LIBOR transactions which reduce or hedge our LIBOR exposure on contracts entered into before January 1,

Our institutional

lender no longer originates, renews or modifies loans at LIBOR effective January 1, 2022.

Effective January 1, 2022, our

institutional lender no longer originates, renews or modifies loans at LIBOR, except in limited situations.

The limited exceptions include

our LIBOR transactions which reduce or hedge our LIBOR exposure on contracts entered into before January 1, 2022.

As of October 1, 2022,

we had two variable rate instruments outstanding that are impacted by changes in interest rates.

The interest rate of the first variable

rate debt instrument is equal to the lender’s LIBOR Rate plus two and one-quarter percent (2.25%) per annum and was paid in full

subsequent to October 1, 2022.

The second variable rate debt instrument is equal to the lender’s BSBY Screen Rate plus one and one-half

percent (1.50%) per annum.

As a means of managing our interest rate risk on the second debt instrument, we entered into an interest rate

swap agreement with our unrelated third party lender to convert this variable rate debt obligation to fixed rate.

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