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The factors listed below are important factors that could cause our actual results to differ materially from our historical results and from projections in the forward-looking statements contained in this report, in our other filings with the SEC, in our news releases, and in oral statements by our representatives.
−Removed: However, other factors that we do not anticipate or that we do not consider significant based on currently available information may also have an adverse effect on our results.
+Added: However, other factors that we do not anticipate or that we do not consider material based on currently available information may also have an adverse effect on our results.
Risks Related to Operating in the Restaurant Industry
+Added: The COVID-19 pandemic has disrupted and is expected to continue to disrupt our business, which has affected and could continue to materially affect our operations, financial condition and results of operations for an extended period of time.
+Added: The COVID-19 pandemic outbreak, federal, state and local government responses to COVID-19 and our responses to the outbreak have all disrupted and may continue to disrupt our business.
+Added: Individuals are being encouraged to practice social distancing, restricted from gathering in groups, and in some areas, placed on complete restriction from non-essential movements outside of their homes.
+Added: In response to the COVID-19 outbreak and these changing conditions, the majority of our company-owned and franchise-operated restaurants have operated in an off-premise capacity, including drive-thru, third-party delivery and carry-out throughout the pandemic.
+Added: We have implemented a number of safety procedures, including implementing heightened sanitation requirements, practicing employee social distancing, and adhering to glove and mask protocol for all restaurant employees.
+Added: Our operating results substantially depend upon our franchisees’ sales volumes, restaurant profitability, and financial stability.
+Added: The financial impact of COVID-19 has had, and could continue to have in the future, an adverse effect on our franchisees’ liquidity.
+Added: To ensure financial health of our valued franchise operators, we reduced March and April marketing fees and postponed collection of these marketing fees, postponed the collection of certain franchisee rental payments and extended all fiscal 2020 franchise development agreements by at least six months and suspended other required capital investments.
+Added: To the extent our franchisees experience financial distress, our operating results may be adversely impacted, potentially materially affecting our liquidity, financial condition, or results of operations.
+Added: As discussed in this report, we have a significant amount of debt outstanding and have previously drawn down on our Variable Funding Notes, which provided us $107.9 million of unrestricted cash, to provide additional security to our liquidity position and provide financial flexibility given uncertain market and economic conditions as a result of the COVID-19 pandemic.
+Added: A material increase in our level of debt could have certain material adverse effects on us.
+Added: There can be no guarantee that additional liquidity will be readily available or available on favorable terms, especially the longer the COVID-19 outbreak lasts.
+Added: Our business could be further disrupted if any of our company or franchised restaurant employees are diagnosed with COVID-19 since this could require us or our franchisees to quarantine some or all of a restaurant’s employees and disinfect the restaurant’s facilities.
+Added: If a significant percentage of our or our franchisees’ workforce is unable to work, whether because of illness, quarantine, limitations on travel or other government restrictions in connection with COVID-19, our results may be adversely impacted, potentially materially affecting our liquidity, financial condition, or results of operations.
+Added: Our suppliers could be adversely impacted by the COVID-19 outbreak.
+Added: 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, we could face cost increases and/or shortages of food items or other supplies across our restaurants and our results could be adversely impacted by such supply interruptions.
+Added: The equity markets in the United States have been extremely volatile due to the COVID-19 outbreak and our stock price has fluctuated significantly.
+Added: Additional government regulations or legislation as a result of COVID-19 in addition to decisions we have made and may make in the future relating to the compensation of and benefit offerings for our company-operated restaurant team members could also have an adverse effect on our business.
+Added: We cannot predict the types of government regulations or legislation that may be passed relating to employee compensation as a result of the COVID-19 outbreak.
+Added: We have implemented an emergency paid sick leave program at our company-operated restaurants and taken other compensation and benefit actions to support our restaurant team members during the COVID-19 business interruption, but those actions may not be sufficient to compensate our team members for the entire duration of any business interruption resulting from COVID-19.
+Added: Those team members might seek and find other employment during that interruption, which could materially adversely affect our ability to properly staff and reopen our restaurants with experienced team members when the business interruptions caused by COVID-19 abate or end.
+Added: The COVID-19 outbreak also may have the effect of heightening other risks disclosed, including, but not limited to, those related to consumer confidence, increase in food and commodity costs, supply chain interruptions, labor availability and cost, cybersecurity incidents, increased indebtedness, regulatory and legal complexity, and governmental regulations.
We face significant competition in the food service industry and our inability to compete may adversely affect our business.
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Economic conditions, state and local laws, or government regulations affecting those states may therefore more greatly impact our results than would similar occurrences in other locations.
−Removed: In addition, if economic conditions deteriorate or are uncertain for a prolonged period of time, or if our operating results decline unexpectedly, we may be required to record impairment charges, which will negatively impact our results of operations for the periods in which they are recorded.
−Removed: Due to the foregoing or other factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for a full fiscal year.
−Removed: These fluctuations may cause our operating results to be below the expectations of public market analysts and investors and may adversely impact our stock price.
Increases in food and commodity costs could decrease our profit margins or result in a modified menu, which could adversely affect our financial results.
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We seek to manage food and commodity costs, including through extended fixed price contracts, strong category and commodity management, and purchasing fundamentals.
−Removed: However, certain commodities such as beef and pork, which currently represent approximately 18% and 7%, respectively, of our consolidated commodity spend, do not lend themselves to fixed price contracts.
+Added: However, certain commodities such as beef and pork, which currently represent approximately 18% and 6% respectively, of our commodity spend, do not lend themselves to fixed price contracts.
We cannot assure you that we will successfully enter into fixed price contracts on a timely basis or on commercially favorable pricing terms.
−Removed: In addition, although our produce contracts contain pre-determined price limits, we are subject to force majeure clauses resulting from weather or acts of God that may result in temporary spikes in costs.
+Added: In addition, although our produce contracts contain predetermined price limits, we are subject to force majeure clauses resulting from weather or acts of God that may result in temporary spikes in costs.
Further, we cannot assure you that we or our franchisees will be able to successfully anticipate and react effectively to changing food and commodity costs by adjusting purchasing practices or menu offerings.
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In addition, if any of our distributors, suppliers, vendors, or other contractors fail to meet our quality or safety standards or otherwise do not perform adequately, or if any one or more of them seeks to terminate its agreement or fails to perform as anticipated, or if there is any disruption in any of our distribution or supply relationships or operations for any reason, our business reputation, financial condition, and results of operations may be materially affected.
−Removed: We have a limited number of suppliers for our major products and rely on a distribution network with a limited number of distribution partners for the majority of our national distribution program in the United States.
+Added: We have a limited number of suppliers for our major products and rely on a distribution network with a limited number of distribution partners for the majority of our national distribution program.
If our suppliers or distributors are unable to fulfill their obligations under their contracts, it could harm our operations.
−Removed: We contract with a distribution network with a limited number of distribution partners located throughout the nation to provide the majority of our food distribution services in the United States.
+Added: We contract with a distribution network with a limited number of distribution partners located throughout the nation to provide the majority of our food distribution services.
Through these arrangements, our food supplies are largely distributed through several primary distributors.
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Negative publicity relating to our business or industry could adversely impact our reputation.
−Removed: Our business can be materially and adversely affected by widespread negative publicity of any type, particularly regarding food quality, food safety, nutritional content, safety or public health issues (such as outbreaks, epidemics, or the prospect of a pandemic), obesity or other health concerns, animal welfare issues, and employee relations issues, among other things.
+Added: Our business can be materially and adversely affected by widespread negative publicity of any type, particularly regarding food quality, food safety, nutritional content, safety or public health issues (such as outbreaks, pandemics, epidemics, or the prospect of any of these), obesity or other health concerns, animal welfare issues, and employee relations issues, among other things.
Adverse publicity in these areas could damage the trust customers place in our brand.
−Removed: The increasingly widespread use of mobile communications and social media platforms has amplified the speed and scope of adverse publicity and could hamper our ability to promptly correct misrepresentations or otherwise respond effectively to negative publicity, whether or not accurate.
+Added: The increasingly widespread use of mobile devices and social media platforms has amplified the speed and scope of adverse publicity and could hamper our ability to promptly correct misrepresentations or otherwise respond effectively to negative publicity, whether or not accurate.
Any widespread negative publicity regarding the Company, our brand, our vendors and suppliers, and our franchisees, or negative publicity about the restaurant industry in general, whether or not accurate, could cause a decline in restaurant sales, and could have a material adverse effect on our financial results.
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Additional taxes or requirements to incur additional employee benefit costs, including the requirements of the Patient Protection and Affordable Care Act (the “Affordable Care Act”) or any new or replacement healthcare requirements, could also adversely impact our operating costs.
−Removed: Moreover, if restaurant managers do not schedule our restaurant crews efficiently, our restaurants may be overstaffed at some times, which adversely impacts our labor costs as a percentage of sales, decreasing our operating margins.
The enactment of additional state or local minimum wage increases above federal wage rates or regulations related to non-exempt employees has increased and could continue to increase labor costs for employees across our system-wide operations, especially considering our concentration of restaurants in California.
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Any failure to do so may adversely impact our operating results by increasing training costs and making it more difficult to deliver outstanding customer service, which could have a material adverse effect on our financial results.
−Removed: In addition, we previously announced that key members of executive management will be leaving the Company in early 2020.
−Removed: The loss of these key executives or any additional members of our executive management team or an inability to effectively plan for and implement a succession plan for key management could negatively impact our business.
We may not have the same resources as our competitors for marketing, advertising, and promotion.
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If systemic or widespread adverse changes in climate or weather patterns occur, we could experience more severe impact, which could have a material adverse effect on our financial results.
−Removed: The impact of these factors may be exacerbated by our geographic profile, as nearly 70% of the restaurants in our Jack in the Box system are located in the states of California and Texas.
+Added: The impact of these factors may be exacerbated by our geographic profile, as nearly 70% of our restaurants are located in the states of California and Texas.
Risks Related to Our Business Strategy
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There are significant risks to our business if a franchisee, particularly one who operates a large number of restaurants, encounters financial difficulties, including bankruptcy, or fails to adhere to our standards, projecting an image inconsistent with our brand or negatively impacting our financial results.
−Removed: Our operating performance could also be negatively affected if our franchisees experience food safety or other operational problems or project an image inconsistent with our brand and values, particularly if our contractual and other rights and remedies are limited, costly to exercise, or subjected to litigation and potential delays.
−Removed: If franchisees do not successfully operate restaurants in a manner consistent with our required standards, our brand’s image and reputation could be harmed, which in turn could hurt our business and operating results.
−Removed: Our ownership mix also affects our results and financial condition.
−Removed: With an increase in the proportion of Jack in the Box franchised restaurants, the percentage of our revenues derived from royalties and rents at franchise restaurants has increased as has the risk that earnings could be negatively impacted by defaults in the payment of royalties and rents.
−Removed: The decision to own restaurants or to operate under franchise agreements is driven by many factors whose interrelationship is complex and changing.
−Removed: Our ability to achieve the benefits of our strategy, of owning a significant higher percentage of franchised restaurants and less company owned restaurants, depends on various factors.
−Removed: Those factors include whether we have effectively selected franchisees that meet our rigorous standards, and whether their performance and the resulting ownership mix supports our brand and financial objectives.
We are subject to financial and regulatory risks associated with our owned and leased properties and real estate development projects.
We own or lease the real properties on which most of our restaurants are located and lease or sublease to the franchisee a majority of our franchised restaurant sites.
−Removed: While we have announced our plan to sell our principal executive offices and consolidate our headquarters into our Innovation Center, we currently still own our principal executives offices and expect to continue to own our Innovation Center and approximately four acres of undeveloped land directly adjacent to the Innovation Center.
We have engaged and continue to engage in real estate development projects.
As is the case with any owner or operator of real property, we are subject to eminent domain proceedings that can impact the value of investments we have made in real property, and we are subject to other potential liabilities, cost and damages arising out of owning, operating, leasing, or otherwise having interests in real property.
−Removed: Changes to estimates related to our property, fixtures, and equipment or operating results that are lower than our current estimates at certain restaurant locations may cause us to incur impairment charges on certain long-lived assets, which may adversely affect our results of operations.
−Removed: In accordance with accounting guidance as it relates to the impairment of long-lived assets, we make certain estimates and projections with regard to individual restaurant operations, as well as our overall performance, in connection with our impairment analyses for long-lived assets.
−Removed: We evaluate our long-lived assets, such as property and equipment, for impairment on an annual basis or whenever events or changes in circumstances indicate that their carrying value may not be recoverable.
−Removed: Impairment evaluations for individual restaurants take into consideration a restaurant’s operating cash flows, the period of time since a restaurant has been opened or remodeled, and the maturity of the related market.
−Removed: The projections of future cash flows used in these analyses require the use of judgment and a number of estimates and projections of future operating results.
−Removed: If actual results differ from our estimates, additional charges for asset impairments may be required in the future.
−Removed: If future impairment charges are significant, our financial results would be adversely affected.
+Added: If we close a restaurant in a leased location, we may remain committed to perform our obligations under the applicable lease, which would include, among other things, payment of the base rent for the balance of the lease term.
+Added: Additionally, the potential losses associated with our inability to cancel leases may result in our keeping open restaurant locations that are performing significantly below targeted levels.
+Added: As a result, ongoing lease obligations at closed or underperforming restaurant locations could impair our results of operations.
+Added: In addition, at the end of the lease term and expiration of all renewal periods, we may be unable to renew the lease without substantial additional cost, if at all.
+Added: As a result, we may be required to close or relocate a restaurant, which could subject us to construction and other costs and risks and may have an adverse effect on our operating performance.
Our tax provision may fluctuate due to changes in expected earnings.
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The difference in treatment of such positions could have an adverse impact on our effective tax rate.
−Removed: Activities related to our sale of Qdoba, and our refranchising, restructuring, and cost savings initiatives entail various risks and may negatively impact our financial results.
−Removed: We are continuously seeking the most cost-effective means and structure to serve our customers, protect our shareholders, and respond to changes in our markets.
−Removed: Over the past several years, we have refranchised a substantial portion of our Jack in the Box restaurants and during 2018 completed the sale of our Qdoba brand.
−Removed: Consistent with these changes, we engaged in restructuring the remaining organization in an effort to reduce overhead costs.
−Removed: As a result, we incurred significant restructuring costs and additional restructuring costs could be incurred, which may vary significantly from year to year depending on the scope of such activities.
−Removed: Such restructuring costs and expenses could adversely impact our financial results.
−Removed: Moreover, as we continue with those cost saving initiatives, the existing risks we face in our business may be intensified.
−Removed: These also depend upon a variety of factors, including our ability to achieve efficiencies.
−Removed: If these various initiatives are not successful, take longer to complete than initially projected, or are not well executed, or if our cost reduction efforts adversely impact our effectiveness, our business operations, financial results, and results of operations could be adversely affected.
General Business Risks
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and lead to potential costs, fines and litigation.
+Added: Damage to our business or reputation or loss of consumer confidence may also result from any failure by our franchisees to implement standard computer systems and information technology, as we are dependent on our franchisees to adopt appropriate safeguards.
These risks may be magnified by increased and changing regulations.
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These digital experiences will require us to open up access into our Point of Sale systems to allow for capabilities like mobile order and pay, third party delivery, and digital menu boards.
−Removed: The collection and use of personal information is regulated at the federal and state levels;
−Removed: such regulations include the California Consumer Privacy Act that is due to take effect January 1, 2020 and which will require our instituting new processes and protections.
+Added: The collection and use of personal information are regulated at the federal and state levels;
+Added: such regulations include the California Consumer Privacy Act.
We increasingly rely on cloud computing and other technologies that result in third parties holding significant amounts of customer or employee information on our behalf.
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Our reputation as a brand or as an employer could also be adversely affected by these types of security breaches or regulatory violations, which could impair our ability to attract and retain qualified employees.
+Added: We are subject to risks associated with our increasing dependence on digital commerce platforms and technologies to maintain and grow sales, and we cannot predict the impact that these digital commerce platforms and technologies, other new or improved technologies or alternative methods of delivery may have on consumer behavior and our financial results.
+Added: Advances in technologies, including advances in digital food order and delivery technologies, and changes in consumer behavior driven by such advances could have a negative effect on our business.
+Added: Technology and consumer offerings continue to develop, and we expect that new and enhanced technologies and consumer offerings will be available in the future, including those with a focus on restaurant modernization, restaurant technology and digital engagement and ordering.
+Added: We may pursue certain of those technologies and consumer offerings if we believe they offer a sustainable guest proposition and can be successfully integrated into our business model.
+Added: However, we cannot predict consumer acceptance of these digital platforms, delivery channels or systems or other technologies or their impact on our business.
+Added: We are dependent on information technology and digital service providers and any material failure, misuse or interruption of our computer systems, supporting infrastructure, consumer-facing digital capabilities or social media platforms could adversely affect our business.
+Added: We are dependent upon information technology and digital service providers to properly conduct our business, including point-of-sale processing in our restaurants, order processing through digital channels, management of our supply chain, collection of cash, payment of obligations and various other processes and procedures.
+Added: Our ability to efficiently manage our business, service our customers and process digital orders through our mobile application and third-party delivery partnerships depends significantly on the reliability and performance of our systems and those managed by our service providers.
+Added: The failure of these systems and processes to operate effectively, including an interruption or degradation in such systems or services, could be harmful and cause delays in customer service, loss of digital sales, reduce efficiency or cause delays in operations.
+Added: Significant capital investments may be required to remediate any such problems.
+Added: Additionally, the success of certain of our strategic initiatives, including to expand our consumer-facing digital capabilities to connect with customers and drive growth, is highly dependent on our technology systems and digital service providers.
If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud.
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As a result, management concluded that our internal control over financial reporting was not effective as of the end of our fiscal year 2019.
−Removed: We are implementing remedial measures and, while there can be no assurance that our efforts will be successful, we plan to remediate the material weakness during fiscal 2020.
+Added: During fiscal year 2020, we completed the remediation measures related to the material weakness and management concluded that our internal control over financial reporting was effective as of the fiscal year ended September 27, 2020.
We cannot be certain that we will be successful in maintaining adequate internal controls over our financial reporting and financial processes in the future.
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The Series 2019-1 Senior Notes are subject to a series of covenants and restrictions customary for transactions of this type, including (i) that the Master Issuer maintains specified reserve accounts to be used to make required payments in respect of the Series 2019-1 Senior Notes, (ii) provisions relating to optional and mandatory prepayments and the related payment of specified amounts, including specified make-whole payments in the case of the Series 2019-1 Class A-2 Notes under certain circumstances, (iii) certain indemnification payments in the event, among other things, the assets pledged as collateral for the Series 2019-1 Senior Notes are in stated ways defective or ineffective and (iv) covenants relating to record keeping, access to information and similar matters.
−Removed: The Series 2019-1 Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of global gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Series 2019-1 Class A-2 Notes on the applicable scheduled maturity date.
+Added: The Series 2019-1 Senior Notes are also subject to customary rapid amortization events provided for in the Indenture, including events tied to failure to maintain stated debt service coverage ratios, the sum of gross sales for specified restaurants being below certain levels on certain measurement dates, certain manager termination events, an event of default, and the failure to repay or refinance the Series 2019-1 Class A-2 Notes on the applicable scheduled maturity date.
The Series 2019-1 Senior Notes are also subject to certain customary events of default, including events relating to non-payment of required interest, principal, or other amounts due on or with respect to the Series 2019-1 Senior Notes, failure to comply with covenants within certain time frames, certain bankruptcy events, breaches of specified representations and warranties, failure of security interests to be effective, and certain judgments.
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Such indebtedness, along with the other contractual commitments of our Company or its subsidiaries, could adversely affect our business, financial condition and results of operations, as well as the ability of certain of our subsidiaries to meet debt payment obligations.
−Removed: Under the Indenture, the Master Issuer has $1.3 billion of outstanding debt as of September 29, 2019.
−Removed: Additionally, the Master Issuer has the ability to borrow amounts from time to time on a revolving basis, up to an aggregate principal amount of $150.0 million pursuant to the Series 2019-1 Class A-1 Notes.
+Added: Under the Indenture, the Master Issuer has approximately $1.4 billion of outstanding debt as of September 27, 2020, which includes $107.9 million of borrowings we drew down on our revolving credit facility during the year to provide additional security and liquidity given the uncertainty of the COVID-19 pandemic.
This level of debt could have certain material adverse effects on the Company, including but not limited to:
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• our level of indebtedness may make us more vulnerable to economic downturns and reduce our flexibility in responding to changing business, regulatory, and economic conditions.
−Removed: The ability to meet payment and other obligations under the debt instruments of our subsidiaries depends on our ability to generate significant cash flow in the future.
−Removed: Our business may not generate cash flow from operations, and there can be no assurances that future borrowings will be available to us in an amount sufficient to enable our subsidiaries to meet our debt payment obligations and to fund other liquidity needs.
−Removed: If our subsidiaries are not able to generate sufficient cash flow to service our debt obligations, our subsidiaries may need to refinance or restructure debt, sell assets, reduce or delay capital investments, or seek to raise additional capital.
−Removed: If our subsidiaries are unable to implement one or more of these alternatives, they may not be able to meet debt payment and other obligations, which could have a material adverse effect on our financial condition.
In addition, we may incur additional indebtedness in the future.
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Changes in accounting standards, policies, or related interpretations by accountants or regulatory entities may negatively impact our financial results.
−Removed: In fiscal 2020 we will adopt a new lease accounting standard that will significantly impact our balance sheet by increasing both our assets and liabilities.
−Removed: Furthermore, the liabilities will have a short-term and long-term component, while the related asset will all be classified as long-term.
−Removed: See Note 1, Nature of Operations and Summary of Significant Accounting Policies , of the notes to the consolidated financial statements for further discussion regarding the effect of new accounting pronouncements to be adopted in future periods.
Many accounting standards require management to make subjective assumptions and estimates, such as those required for long-lived assets, retirement benefits, self-insurance, restaurant closing costs, goodwill and other intangibles, legal accruals, and income taxes.
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Such losses could have a material adverse effect on our business and results of operations.
−Removed: Risks Related to Our Common Stock
−Removed: Our quarterly results and, as a result, the price of our common stock, may fluctuate significantly and could fall below the expectations of securities analysts and investors due to various factors.
−Removed: Our quarterly results and the price of our common stock may each fluctuate significantly and could fail to meet the expectations of securities analysts and investors because of factors including:
−Removed: actual or anticipated fluctuations in our operating results;
−Removed: changes in earnings estimated by securities analysts or our ability to meet those estimates;
−Removed: the operating and stock price performance of comparable companies;
−Removed: changes in our stockholder base;
−Removed: volatility of the stock market in general;
−Removed: changes to the regulatory and legal environment in which we operate;
−Removed: general domestic and worldwide economic conditions.
−Removed: As a result of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year.
−Removed: Same-store sales, system-wide sales, and earnings from continuing operations per share in any particular future period may decrease, or commodity, labor, or other operating costs and selling, general, and administrative expenses may increase.
−Removed: In the future, operating results may fall below the expectations of securities analysts and investors, which could cause the price of our common stock to fall.
−Removed: In addition, the stock market has historically experienced significant price and volume fluctuations.
−Removed: These fluctuations may be unrelated to the operating performance of particular companies.
−Removed: These broad market fluctuations may cause declines in the price of our common stock.
−Removed: The price of our common stock could fluctuate based upon factors that have little or nothing to do with our financial results, and those fluctuations could materially reduce the price of our common stock.
−Removed: Actions of activist stockholders could cause us to incur substantial costs, divert management’s attention and resources, and have an adverse effect on our business.
−Removed: From time to time, we may be subject to proposals by stockholders urging us to take certain corporate actions.
−Removed: If activist stockholder activities ensue, our business could be adversely affected because responding to proxy contests and reacting to other actions by activist stockholders can be costly and time-consuming, disrupt our operations and divert the attention of management and our employees.
−Removed: For example, we may be required to retain the services of various professionals to advise us on activist stockholder matters, including legal, financial, and communications advisers, the costs of which may negatively impact our future financial results.
−Removed: In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist stockholder initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, and joint venture partners, and cause our stock price to experience periods of volatility or stagnation.
Risks Related to Government Regulations
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Unauthorized workers are subject to deportation and may subject us to fines or penalties, and if any of our employees or our franchisees’ employees are found to be unauthorized, we could experience adverse publicity that negatively impacts our brand and may make it more difficult to hire and keep qualified employees.
−Removed: Termination of a significant number of employees who are found to be unauthorized workers may disrupt operations, cause temporary increases in labor costs to train new employees, and result in additional adverse publicity.
+Added: Termination of a significant number of employees who are found to be unauthorized workers may disrupt operations, cause temporary increases in labor costs to train
+Added: new employees, and result in additional adverse publicity.
We could also become subject to fines, penalties, and other costs related to claims that we did not fully comply with all record keeping obligations of federal and state immigration compliance laws.
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Any failure by us or our franchisees to obtain and maintain these licenses, permits, and approvals could adversely affect our financial results.
+Added: Risks Related to Our Common Stock
+Added: Our quarterly results and, as a result, the price of our common stock, may fluctuate significantly and could fall below the expectations of securities analysts and investors due to various factors.
+Added: Our quarterly results and the price of our common stock may each fluctuate significantly and could fail to meet the expectations of securities analysts and investors because of factors including:
+Added: • actual or anticipated fluctuations in our operating results;
+Added: • changes in earnings estimated by securities analysts or our ability to meet those estimates;
+Added: • the operating and stock price performance of comparable companies;
+Added: • changes in our stockholder base;
+Added: • volatility of the stock market in general;
+Added: • changes to the regulatory and legal environment in which we operate;
+Added: • general domestic and worldwide economic conditions.
+Added: As a result of these factors, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year.
+Added: Same-store sales, system-wide sales, and earnings from continuing operations per share in any particular future period may decrease, or commodity, labor, or other operating costs and selling, general, and administrative expenses may increase.
+Added: In the future, operating results may fall below the expectations of securities analysts and investors, which could cause the price of our common stock to fall.
+Added: In addition, the stock market has historically experienced significant price and volume fluctuations.
+Added: These fluctuations may be unrelated to the operating performance of particular companies.
+Added: These broad market fluctuations may cause declines in the price of our common stock.
+Added: The price of our common stock could fluctuate based upon factors that have little or nothing to do with our financial results, and those fluctuations could materially reduce the price of our common stock.
+Added: Actions of activist stockholders could cause us to incur substantial costs, divert management’s attention and resources, and have an adverse effect on our business.
+Added: From time to time, we may be subject to proposals by stockholders urging us to take certain corporate actions.
+Added: If activist stockholder activities ensue, our business could be adversely affected because responding to proxy contests and reacting to other actions by activist stockholders can be costly and time-consuming, disrupt our operations and divert the attention of management and our employees.
+Added: For example, we may be required to retain the services of various professionals to advise us on activist stockholder matters, including legal, financial, and communications advisers, the costs of which may negatively impact our future financial results.
+Added: In addition, perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist stockholder initiatives may result in the loss of potential business opportunities, harm our ability to attract new investors, customers, employees, and joint venture partners, and cause our stock price to experience periods of volatility or stagnation.
UNRESOLVED STAFF COMMENTS
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.