What changed in this filing

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Item 1A. Risk Factors

2026-09-25 compared with 2025-09-26 · 78 added, 95 removed, 297 unchanged (37% of the section changed)

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The United States and other countries have experienced, and may experience in the future, outbreaks of viruses, such as COVID-19, norovirus, the bird/avian flu or other diseases.

We cannot predict whether such infectious diseases, including future variants of COVID-19, may impact sales and traffic at our stores, create staffing issues, increase commodity costs or result in store closures, which could subsequently damage or could reduce consumer traffic and could have a material adverse effect on our results of operations.

We cannot predict whether such infectious diseases may impact sales and traffic at our stores, create staffing issues, increase commodity costs or result in store closures, which could subsequently damage or could reduce consumer traffic and could have a material adverse effect on our results of operations.

In recent years there has been publicity concerning E.

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The preferences of our customers toward beef and chicken could be affected by changes in consumer health or dietary trends and preferences regarding meat consumption or health concerns and publicity concerning food quality, illness and injury generally.

Changes in consumer dietary preferences may impact our menu offerings.

Changes in consumer dietary preferences and weight-management medications or treatments may cause consumers to avoid our products in favor of alternative restaurants, to consume less of our products or to decrease the amount they eat at restaurants in general which may impact our menu offerings.

Further, consumers may change their dining-in preferences, such as during the COVID-19 pandemic, when consumers often chose to order food to go or for delivery.

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Multi-unit businesses such as ours can be adversely affected by publicity resulting from complaints or litigation alleging poor food quality, poor service, guest discrimination, food-borne illness, viruses, product defects, personal injury, adverse health effects (including obesity), employee relations or other concerns stemming from one or a limited number of our stores.

Even when the allegations or complaints are not accurate or valid, unfavorable publicity relating to our multi-year strategic plan, or one or more of our stores may adversely affect public perception of the entire brand before we have the opportunity to respond to and address such allegations.

Additionally, social media can be utilized to target specific companies or brands as a result of a variety of actual or perceived actions or inactions that are disfavored by our customers, employees, or interest groups, which can materially and immediately impact consumer behavior.

Even when the allegations or complaints are not accurate or valid, unfavorable publicity relating to our strategy or customer experiences or perceptions relating to one or more of our stores may adversely affect public perception of the entire brand before we have the opportunity to respond to and address such allegations.

Additionally, social media has at times been utilized to target specific companies or brands, including ours, as a result of a variety of actual or perceived actions or inactions that are disfavored by our customers, employees, or interest groups, which can materially and immediately impact consumer behavior.

Social media allows users to organize collective actions and engage in other brand-damaging behaviors that, if targeted at us, could impact our business.

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Such uses of social media by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation or the market price for our common stock.

Failure to achieve the goals or sustain the results of our multi-year strategic plan may have an adverse effect on our business, results of operations and financial condition.

Our multi-year strategic plan is in various stages of testing, evaluation and implementation, aimed to improve guest experience and increase profitability.

These initiatives of our multi-year strategic plan are generally aimed at enhancing menu and retail options, reducing our costs, improving margins and increasing brand awareness, including through expanding our footprint and investing in strategic relationships.

Implementation of these initiatives across our store base is inherently risky even when initiatives have been tested successfully on a more limited scale, and customers may not be receptive to these changes, which may negatively impact our financial condition and results of operations.

In the first quarter of 2026, we introduced an updated logo, which received unfavorable consumer feedback and generated negative publicity.

Other initiatives contemplated under our multi-year strategic plan may elicit similar adverse reactions, which could adversely affect consumer perceptions of our brand, our operational and financial performance, and the market price for our common stock.

Successful system-wide implementation across hundreds of stores and involving tens of thousands of employees relies on consistency of training, stability of workforce, ease of execution and the absence of offsetting factors that can adversely influence results.

Failure to achieve successful implementation of our initiatives may adversely affect our business, financial condition and results of operations.

Failure to successfully implement our strategic priorities and initiatives may have an adverse effect on our business, results of operations and financial condition.

Our strategic priorities and initiatives are aimed to improve the guest experience and increase profitability and are in various stages of testing, evaluation and implementation.

Implementation of these priorities and initiatives across our store base is inherently risky even when tested successfully on a more limited scale, and customers have not always been receptive to these changes and may not be receptive to our strategic priorities and initiatives in the future.

We have experienced negative reactions to certain of our strategic priorities and initiatives, including efforts related to our branding, by consumers and interest groups, which has adversely impacted our business, financial condition and results of operations.

Even where such priorities and initiatives are positively received, successful system-wide implementation across hundreds of stores and involving tens of thousands of employees relies on consistency of training, stability of workforce, ease of execution and the absence of offsetting factors that can adversely influence results.

Failure to achieve successful implementation of our strategic priorities and initiatives had and could in the future have an adverse effect on our business, financial condition and results of operations.

We face intense competition, and if we are unable to continue to compete effectively, our business, financial condition and results of operations may be adversely affected.

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We compete with national and regional restaurant and retail chains and locally owned restaurants and retailers within each market.

Competition from other regional or national restaurant and retail chains typically represent the more important competitive influence, principally because of their significant marketing and financial resources.

Competition from other regional or national restaurant and retail chains typically represents the more important competitive influence, principally because of their significant marketing and financial resources.

We face competition as a result of the convergence of grocery, deli, retail and restaurant services, particularly in the supermarket industry.

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We compete primarily on the quality, variety and perceived value of menu and retail items.

We also compete with other restaurant chains and other retail businesses for quality site locations, management and hourly employees, and other competitive pressures may affect both the availability and cost of these important resources.

We also compete with other restaurant chains and other retail businesses for management and hourly employees and other competitive pressures may affect both the availability and cost of these important resources.

The number and location of stores, the growth of e-commerce, type of concept, quality and efficiency of service, attractiveness of facilities and effectiveness of advertising and marketing programs also are important factors.

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Our failure to protect or successfully assert our intellectual property rights could make us less competitive and could have an adverse effect on our business and results of operations.

Individual store locations are affected by local conditions that could change and adversely affect the carrying value of those locations, and any new stores we open may not be profitable.

The success of our business depends on the success of individual locations, which in turn depends on stability of or improvements in operating conditions at and around those locations.

Our revenues and expenses can be affected significantly by the number and timing of the opening of new stores and the closing or relocating existing stores.

Competition for suitable store sites and operating personnel in target markets is intense, and there can be no assurance that we will be able to find sufficient suitable locations, or negotiate suitable purchase or lease terms when opening new stores.

Further, we incur substantial pre-opening expenses each time we open a new store and new stores typically experience an adjustment period before sales levels and operating margins normalize.

Even sales at successful newly opened stores generally do not make a significant contribution to profitability in their initial months of operation.

We also incur other expenses when we close or relocate existing stores, which may be higher than anticipated.

An increase in such expenses could have an adverse effect on our results of operations.

As demographic and economic patterns (e.g., highway or roadway traffic patterns, concentrations of general retail or hotel activity, local population densities or increased competition) change, current locations may not continue to be attractive or profitable.

Possible declines in neighborhoods where our stores are located or adverse economic conditions in areas surrounding those neighborhoods could result in reduced revenues in those locations.

Additionally, new store locations may be located in areas where we have lower market presence and, as a result, less or no meaningful business experience than in our traditional, existing markets.

Those new markets may have different competitive conditions, consumer tastes and discretionary spending patterns than our traditional, existing markets, which may cause our new store locations to be less successful than restaurants in our existing markets.

An additional risk of expanding into new markets is the potential for lower or lacking market awareness of our brand in those areas.

The occurrence of one or more of these events could have a material adverse effect on our revenues and results of operations as well as the carrying value of our individual locations.

Risks Related to Our Capital Structure

The performance of our business as affected by the level of our indebtedness could prevent us from meeting the obligations under our revolving credit facility or the indentures governing the 2026 Notes and the 2030 Notes or maintaining sufficient liquidity to operate our business or service our debt obligations, and we cannot provide any guarantee of future cash dividend payments or that we will be able to actively repurchase our common stock pursuant to a share repurchase program.

The performance of our business as affected by the level of our indebtedness could prevent us from meeting the obligations under our revolving credit facility or the indentures governing the 2030 Notes or maintaining sufficient liquidity to operate our business or service our debt obligations, and we cannot provide any guarantee of future cash dividend payments or that we will be able to actively repurchase our common stock pursuant to a share repurchase program.

Our consolidated indebtedness and restrictions in our revolving credit facility may have the effect, among other things, of reducing our flexibility to respond to changing business and economic conditions and increasing borrowing costs.

Given the significant uncertainty relating to the macroeconomic environment, there are potential scenarios under which we could fail to comply with these covenants, which would result in an event of default that, if not waived, could have a material adverse effect on our financial condition, results of operations or ability to continue to service our debt obligations.

A default under our credit agreement or under the indentures governing the 2026 Notes and the 2030 Notes may also significantly affect our ability to obtain additional or alternative financing.

A default under our credit agreement or under the indentures governing the 2030 Notes may also significantly affect our ability to obtain additional or alternative financing.

For example, the lenders’ ongoing obligation to extend credit under the revolving credit facility is dependent upon our compliance with certain covenants and restrictions, as set forth in our credit agreement.

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Our inability to refinance our indebtedness when necessary or to do so upon attractive terms may have a material adverse effect on our liquidity and results of operations.

Depending on the impact of macroeconomic environment, we may seek other sources of liquidity and other ways of preserving liquidity.

Depending on the macroeconomic environment, we may seek other sources of liquidity and other ways of preserving liquidity.

No assurance can be made that sources of additional liquidity will be readily available or that we will be successful in obtaining or preserving such liquidity.

Further, no assurance can be made that sources of additional liquidity will be available on terms that are favorable to us.

In 2024, as part of our multi-year strategic plan, we made the decision to reduce our quarterly dividends.

In 2024, we made the decision to reduce our quarterly dividends.

Any future determination to pay cash dividends on our common stock, or to pay cash dividends in an amount comparable to historical cash dividends on our common stock, will be based primarily upon our financial condition, prospects, results of operations and business requirements and our Board of Directors’ conclusion that the declaration of cash dividends is in the best interest of our shareholders and is in compliance with all laws and agreements applicable to the payment of dividends.

Furthermore, there can be no assurance that we will be able to actively repurchase our common stock, and we may discontinue plans to repurchase common stock at any time.

We may be unable to raise the funds necessary to repurchase the 2026 Notes or the 2030 Notes for cash following a fundamental change, or to pay the cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the 2026 Notes or the 2030 Notes or pay cash upon their conversion.

Noteholders may require us to repurchase their 2026 Notes or 2030 Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the 2026 Notes or the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any.

In addition, all conversions of the 2026 Notes or the 2030 Notes will be settled partially or entirely in cash.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2026 Notes or the 2030 Notes or pay the cash amounts due upon conversion.

In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2026 Notes or the 2030 Notes or pay the cash amounts due upon conversion.

Our failure to repurchase the 2026 Notes or the 2030 Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indentures governing the 2026 Notes or the 2030 Notes.

A default under the indentures governing the 2026 Notes or the 2030 Notes or the fundamental change itself could also lead to a default under agreements governing our other indebtedness (including, for the avoidance of doubt, the indentures governing the 2026 Notes and the 2030 Notes), which may result in that other indebtedness becoming immediately payable in full.

We may not have or be able to secure financing for sufficient funds to satisfy all amounts due under the other indebtedness and the indentures governing the 2026 Notes or the 2030 Notes.

Provisions in the indentures governing the 2026 Notes or the 2030 Notes could delay or discourage a takeover of us.

Certain provisions in the 2026 Notes and the 2030 Notes and the indentures governing the 2026 Notes and the 2030 Notes could make a third party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their 2026 Notes or 2030 Notes for cash.

In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate for the 2026 Notes or the 2030 Notes.

In either case, and in other cases, our obligations under the 2026 Notes or the 2030 Notes and the indentures governing the 2026 Notes or the 2030 Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.

We may be unable to raise the funds necessary to repurchase the 2030 Notes for cash following a fundamental change, or to pay the cash amounts due upon conversion, and our other indebtedness may limit our ability to repurchase the 2030 Notes or pay cash upon their conversion.

Noteholders may require us to repurchase their 2030 Notes following a fundamental change at a cash repurchase price generally equal to the principal amount of the 2030 Notes to be repurchased, plus accrued and unpaid interest, if any.

In addition, all conversions of the 2030 Notes will be settled partially or entirely in cash.

We may not have enough available cash or be able to obtain financing at the time we are required to repurchase the 2030 Notes or pay the cash amounts due upon conversion.

In addition, applicable law, regulatory authorities and the agreements governing our other indebtedness may restrict our ability to repurchase the 2030 Notes or pay the cash amounts due upon conversion.

Our failure to repurchase the 2030 Notes or to pay the cash amounts due upon conversion when required will constitute a default under the indentures governing the 2030 Notes.

A default under the indentures governing the 2030 Notes or the fundamental change itself could also lead to a default under agreements governing our other indebtedness (including, for the avoidance of doubt, the indentures governing the 2030 Notes), which may result in that other indebtedness becoming immediately payable in full.

We may not have or be able to secure financing for sufficient funds to satisfy all amounts due under the other indebtedness and the indentures governing the 2030 Notes.

Provisions in the indentures governing the 2030 Notes could delay or discourage a takeover of us.

Certain provisions in the 2030 Notes and the indentures governing the 2030 Notes could make a third party attempt to acquire us more difficult or expensive.

For example, if a takeover constitutes a fundamental change, then noteholders will have the right to require us to repurchase their 2030 Notes for cash.

In addition, if a takeover constitutes a make-whole fundamental change, then we may be required to temporarily increase the conversion rate for the 2030 Notes.

In either case, and in other cases, our obligations under the 2030 Notes and the indentures governing the 2030 Notes could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, including in a transaction that noteholders or holders of our common stock may view as favorable.

The capped call transactions in connection with the 2030 Notes may affect the value of our common stock.

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Any of these activities could, however, adversely affect the trading price of our common stock.

The convertible note hedge and warrant transactions in connection with the 2026 Notes may affect the value of our common stock.

In connection with the issuance of the 2026 Notes, we entered into convertible note hedge transactions with one or more of the initial purchasers of the 2026 Notes or their respective affiliates and/or other financial institutions (the “hedge counterparties”).

The convertible note hedge transactions cover, subject to customary anti-dilution adjustments, the number of shares of common stock that initially underlie the 2026 Notes.

We also entered into warrant transactions with the hedge counterparties collectively relating to the same number of shares of our common stock, subject to customary anti-dilution adjustments, and for which we received premiums to partially offset the cost of entering into the hedge transactions.

Before the maturity of the 2026 convertible notes, we expect that the hedge counterparties or their affiliates will modify their hedge positions with respect to the existing convertible note hedge transactions and warrant transactions from time to time, and are likely to do so during any observation period for the 2026 convertible notes, by purchasing or selling shares of our common stock or other securities of ours, in privately negotiated transactions or open-market transactions or by entering into or unwinding various over-the-counter derivative transactions with respect to our common stock.

The effect, if any, of these activities on the trading price of our common stock will depend on a variety of factors, including market conditions, and is uncertain at this time.

Any of these activities could, however, adversely affect the trading price of our common stock.

We are subject to counterparty risk with respect to the convertible note hedge transactions and capped call transactions.

The hedge counterparties and the option counterparties are financial institutions, and we are subject to the risk that one or more of the hedge counterparties might default under their respective convertible note hedge transactions, or that one or more of the option counterparties might default under their respective capped call transactions.

Our exposure to the credit risk of the hedge counterparties and the option counterparties is not secured by any collateral.

We are subject to counterparty risk with respect to the capped call transactions.

The option counterparties are financial institutions, and we are subject to the risk that one or more of the option counterparties might default under their respective capped call transactions.

Our exposure to the credit risk of the option counterparties is not secured by any collateral.

Global economic conditions have from time to time resulted in the actual or perceived failure or financial difficulties of many financial institutions.

If a hedge counterparty or an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under our transactions with such hedge counterparty or option counterparty.

If an option counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under our transactions with such option counterparty.

Our exposure will depend on many factors, but, generally, the increase in our exposure will be correlated to the increase in the market price and in the volatility of our common stock.

In addition, upon a default by any hedge or option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.

We can provide no assurances as to the financial stability or viability of any of the hedge or option counterparties.

Conversion of the 2026 Notes or the 2030 Notes or exercise of the warrants evidenced by the warrant transactions related to the 2026 Notes may dilute the ownership interest of existing shareholders, including noteholders who have previously converted their 2026 Notes or 2030 Notes.

At our election, if applicable, we may settle 2026 Notes or 2030 Notes tendered for conversion partly in shares of our common stock.

Furthermore, the warrants evidenced by the warrant transactions are expected to be settled on a net-share basis.

As a result, the conversion of some or all of the 2026 Notes or the exercise of some or all of such warrants may dilute the ownership interests of existing shareholders.

Any sales in the public market of the shares of our common stock issuable upon such conversion of the 2026 Notes or such exercise of the warrants could adversely affect prevailing market prices of our common stock.

In addition, the existence of the 2026 Notes may encourage short selling by market participants because the conversion of the 2026 Notes could depress the price of our common stock.

In addition, upon a default by any option counterparty, we may suffer adverse tax consequences and more dilution than we currently anticipate with respect to our common stock.

We can provide no assurances as to the financial stability or viability of any of the option counterparties.

Conversion of the 2030 Notes may dilute the ownership interest of existing shareholders.

At our election, if applicable, we may settle 2030 Notes tendered for conversion partly in shares of our common stock, which could dilute the ownership interests of existing shareholders.

Any sales in the public market of shares issued upon conversion of the 2030 Notes could adversely affect the market price of our common stock.

Risks Related to Supply Chains

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Our information technology systems are subject to damage or interruption from power outages, computer, network, cable system, internet and telecommunications failures, computer viruses, security breaches, catastrophic events such as fires, floods, earthquakes, tornadoes, hurricanes, acts of war or terrorism, and usage errors by our employees.

If our information technology and telecommunication systems are damaged or cease to function properly, we may have to make a significant investment to repair or replace them, and we could suffer loss of critical data and interruptions or delays in our operations in the interim.

If our information technology and telecommunication systems are damaged or cease to function properly, or become outdated, we may have to make a significant investment to repair, upgrade or replace them, and we could suffer loss of critical data and interruptions or delays in our operations in the interim.

In addition, from time to time, our systems may become obsolete or require attention and could result in interruptions in our services and non-compliance with certain laws or regulations.

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While we make efforts to ensure that our outsourced providers are observing proper standards and controls, we cannot guarantee that breaches, disruptions or failures caused by these providers will not occur.

Additionally, we have incorporated artificial intelligence solutions into our business, and we continue to evaluate the use of artificial intelligence throughout our organization.

Artificial intelligence tools used by us, our vendors and our suppliers may increase our privacy and cybersecurity risks.

These tools may rely on data containing our proprietary information, and any breach or misuse of that data could result in its unauthorized release.

Any such unauthorized release could result in reputational harm to us or subject us to claims alleging violations of intellectual property law or data privacy rights.

If we fail or our vendors fail to comply with privacy and data protection laws or our systems are compromised, our operations could be negatively impacted and we could be subject to litigation and adverse publicity.

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Some of our business processes are currently outsourced to third parties.

Such processes include distribution of food and retail products to our store locations and customers, credit and debit card authorization and processing, gift card tracking and authorization, payroll payments, payroll taxes processing, employee payroll card services, health care and workers’ compensation insurance claims processing, wage and related tax credit documentation and approval, guest satisfaction survey programs, employee engagement surveys and externally hosted business software applications.

Such processes include distribution of food and retail products to our store locations and customers, credit and debit card authorization and processing, gift card tracking and authorization, payroll payments, payroll taxes processing, employee payroll card services, health care and workers’ compensation insurance claims processing, wage and related tax credit documentation and approval, our loyalty program, guest satisfaction survey programs, employee engagement surveys and externally hosted business software applications.

We cannot ensure that all providers of outsourced services are observing proper internal control practices, such as redundant processing facilities, and there are no guarantees that failures will not occur.

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Compliance with these laws and regulations can be costly and can increase our exposure to litigation or governmental investigations or proceedings.

There also has been increasing focus by U.S.

and foreign governmental authorities on environmental matters, such as climate change, the reduction of greenhouse gases and water consumption.

This increased focus may lead to new initiatives directed at regulating an as yet unspecified array of environmental matters.

Legislative, regulatory or other efforts to combat climate change or other environmental concerns could result in future increases in taxes, the cost of raw materials, transportation and utilities, which could decrease our operating profits and necessitate future investments in facilities and equipment.

Regulatory requirements and governmental priorities relating to environmental matters continue to evolve in the United States and internationally.

Future legislative, regulatory or policy changes, as well as differing approaches among jurisdictions, could increase our compliance, operating and capital costs, affect the availability or cost of raw materials and utilities, or require changes to our business practices.

Any such developments could increase the cost of raw materials, transportation and utilities, which could decrease our operating profits and necessitate future investments in facilities and equipment.

The impact of current laws and regulations, the effect of future changes in laws or regulations that impose additional requirements and the consequences of litigation relating to current or future laws and regulations could increase our compliance and other costs of doing business and therefore have an adverse effect on our results of operations.

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Typically, licenses must be renewed annually and may be revoked, suspended or denied renewal for cause at any time if governmental authorities determine that our conduct violates applicable regulations, which could have a material adverse effect on our business and results of operations.

Our advertising is heavily dependent on billboards, which are highly regulated, and our evolving marketing strategy involves increased advertising and marketing costs that may have an adverse effect on our business, results of operations and financial condition.

Our advertising is heavily dependent on billboards, which are highly regulated, and our marketing strategy may be ineffective, which may have an adverse effect on our business, results of operations and financial condition.

Historically, we have relied upon billboards as our principal method of advertising.

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Thus, signage or billboard restrictions or loss of existing signage or billboards could adversely affect our visibility and ability to attract customers.

Additionally, as we continue to evolve our marketing strategy, we are increasingly utilizing more traditional and higher cost methods of advertising, such as national cable television, radio, online and digital media and our loyalty program.

However, we are increasingly utilizing more traditional and higher cost methods of advertising, such as national cable television, radio, online and digital media and our loyalty program.

These types of advertising, their effects upon our revenues and, in turn, our profits, are uncertain.

Additionally, if our competitors increased their spending on advertising and promotions, we could be forced to substantially increase our advertising, media or marketing expenses.

Additionally, our marketing strategy or changes in our marketing strategy may not achieve the desired results or otherwise may be ineffective, and consequently, we may experience lower volumes of guest traffic, which may adversely impact our business, results of operations and financial condition.

Further, if our competitors increased their spending on advertising and promotions, we could be forced to substantially increase our advertising, media or marketing expenses.

If we did so or if our current advertising and promotion programs become less effective, we could experience a material adverse effect on our results of operations.

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Our business could be negatively affected as a result of actions of activist shareholders.

Activist shareholders have nominated candidates for election to our Board of Directors at our annual meetings of shareholders multiple times, resulting in proxy contests, and called publicly for special meetings of shareholders to consider other proposals relating to corporate policies of the Company, including on matters such as our dividend policy, capital structure and strategic alternatives.

The Lion Fund II, L.P., Biglari Capital Corp., First Guard Insurance Company, Southern Pioneer Property and Casualty Insurance Company, Biglari Holdings Inc., Biglari Reinsurance Ltd.

and Biglari Insurance Group Inc.

are affiliates of Sardar Biglari (“Biglari”), and are the beneficial owners of approximately 2.9% of our outstanding common stock as of September 18, 2025.

We recently received notice that Biglari intends to engage in a “vote-no” campaign against certain of our directors and proposals in connection with our 2025 annual meeting of shareholders.

If a proxy contest ensues, or if we become engaged in a proxy contest or other public engagement with another activist shareholder in the future, our business could be adversely affected because:

In the past, activist shareholders have nominated candidates for election to our Board of Directors at our annual meetings of shareholders multiple times, resulting in proxy contests, and called publicly for special meetings of shareholders to consider other proposals relating to corporate policies of the Company, including on matters such as our dividend policy, capital structure and strategic alternatives.

If we become engaged in a proxy contest or other public engagement with an activist shareholder in the future, our business could be adversely affected because:

responding to public proposals and director nominations, special meeting requests and other actions by activist shareholders can disrupt our operations, be costly and time-consuming, and divert the attention of our management and employees;

perceived uncertainties as to our future direction may result in the loss of potential business opportunities, and may make it more difficult to attract and retain qualified personnel and business partners;

claims made by activist shareholders in connection with a proxy contest or otherwise may harm our reputation, damage our relations with customers, employees and business relations such as suppliers, or otherwise impair our business;

claims or attacks made by activist shareholders in connection with a proxy contest or otherwise, including through social media platforms, may harm our reputation, damage our relations with customers, employees and business relations such as suppliers, or otherwise impair our business;

pursuit of an activist shareholder’s agenda may adversely affect our ability to effectively implement our business strategy and create additional value for our shareholders.

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We have experienced and may continue to experience challenges in recruiting and retaining team members in various locations.

Additionally, David Deno began serving as Chief Executive Officer on August 10, 2026, replacing Julie Masino.

Leadership transitions can create risks as individuals are integrated into new roles, including that onboarding shifts management’s attention away from business operations, failure to retain other key personnel, or loss of institutional knowledge.

We may pursue strategic investments or initiatives now or in the future, which may not yield their expected benefits, resulting in a loss of some or all of our investment.

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Additionally, failure to maximize or successfully execute our customer loyalty program could adversely impact growth.

Individual store locations are affected by local conditions that could change and adversely affect the carrying value of those locations.

The success of our business depends on the success of individual locations, which in turn depends on stability of or improvements in operating conditions at and around those locations.

Our revenues and expenses can be affected significantly by the number and timing of the opening of new stores and the closing, relocating and remodeling of existing stores.

We incur substantial pre-opening expenses each time we open a new store and other expenses when we close, relocate or remodel existing stores, which may be higher than anticipated.

An increase in such expenses could have an adverse effect on our results of operations.

Also, as demographic and economic patterns (e.g., highway or roadway traffic patterns, concentrations of general retail or hotel activity, local population densities or increased competition) change, current locations may not continue to be attractive or profitable.

Possible declines in neighborhoods where our stores are located or adverse economic conditions in areas surrounding those neighborhoods could result in reduced revenues in those locations.

The occurrence of one or more of these events could have a material adverse effect on our revenues and results of operations as well as the carrying value of our individual locations.

In addition, we may divest, close, sell, exit or otherwise restructure certain businesses, concepts, restaurants or assets, and such actions may not achieve their intended results or may result in charges, costs or liabilities that are greater than expected.

For example, in 2026, we sold certain assets used in our Maple Street Biscuit Company (“MSBC”) business and announced the closure of the remaining MSBC locations.

Divestiture and closure activities may result in impairment charges, losses on sale, severance costs, lease termination costs, other exit costs, disruption to management’s attention, operational complexity and other costs or liabilities, and actual charges and costs may differ from our estimates.

Any such effects could adversely affect our business, results of operations, financial condition and cash flows.

Failure to adequately address sustainability matters could adversely affect our brand, business, results of operations and financial condition.

There has been increasing public focus by investors, environmental activists, the media and governmental and regulatory agencies on sustainability matters, including packaging and waste, animal health and welfare, human rights, climate change, greenhouse gases and land, energy and water use.

In response to shareholders’ heightened level of expectation for expanded sustainability disclosure, we publish a Sustainability Report annually describing our sustainability efforts and goals.

Execution of the strategies and achievement of the goals outlined in the Sustainability Report are subject to risks and uncertainties, including our ability to meet our goals within the currently projected costs and the expected timeframes;

In response to shareholders’ heightened level of expectation for expanded sustainability disclosure, we publish a Corporate Responsibility Report annually describing our sustainability efforts and goals.

Execution of the strategies and achievement of the goals outlined in the Corporate Responsibility Report are subject to risks and uncertainties, including our ability to meet our goals within the currently projected costs and the expected timeframes;

unforeseen design, operational and technological difficulties;

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Any failure or perceived failure by us to manage sustainability issues or comply with regulations could have a material adverse effect on our reputation and on our business, results of operations, financial condition or stock price, including the sustainability of our business over time.

If we fail to execute our business strategy, which includes our ability to find new store locations and open new stores that are profitable, our business could suffer.

One of the means of achieving our growth objectives is opening and operating new and profitable stores.

This strategy involves numerous risks, and we may not be able to open all of our planned new stores and the new stores that we open may not be profitable or as profitable as our existing stores.

A significant risk in executing our business strategy is locating, securing and profitably operating an adequate supply of suitable new store sites.

Competition for suitable store sites and operating personnel in our target markets is intense, and there can be no assurance that we will be able to find sufficient suitable locations, or negotiate suitable purchase or lease terms, for our planned expansion in any future period.

Economic conditions may also reduce commercial development activity and limit the availability of attractive sites for new stores.

New stores typically experience an adjustment period before sales levels and operating margins normalize, and even sales at successful newly opened stores generally do not make a significant contribution to profitability in their initial months of operation.

Our ability to open and operate new stores successfully also depends on numerous other factors, some of which are beyond our control, including, among other items discussed in other risk factors, the following:

our ability to control construction and development costs of new stores;

our ability to manage the local, state or other regulatory approvals and permits, zoning and licensing processes in a timely manner;

our ability to recruit and appropriately train employees and staff the stores;

consumer acceptance of our stores in new markets;

and our ability to manage construction delays related to the opening of a new store.

Delays or failures in opening new stores, or achieving lower than expected sales in new stores, or drawing a greater than expected proportion of sales in new stores from existing stores, could materially adversely affect our business strategy and could have an adverse effect on our business and results of operations.

Some of our new store locations may be located in areas where we have lower market presence and, as a result, less or no meaningful business experience than in our traditional, existing markets.

An additional risk of expanding into new markets is the potential for lower or lacking market awareness of our brand in those areas.

General Risk Factors

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The identification of a material weakness could indicate a lack of controls adequate to generate accurate financial statements that, in turn, could cause a loss of investor confidence and decline in the market price of our common stock.

We cannot assure you that we will be able to timely remediate any material weaknesses that may be identified in future periods or maintain all of the controls necessary for continued compliance.

Likewise, we cannot assure you that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.

We cannot guarantee that we will be able to timely remediate any material weaknesses that may be identified in future periods or maintain all of the controls necessary for continued compliance.

Likewise, we cannot guarantee that we will be able to retain sufficient skilled finance and accounting personnel, especially in light of the increased demand for such personnel among publicly traded companies.

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