What changed in this filing

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Item 1A. Risk Factors

2026-02-25 compared with 2025-02-26 · 155 added, 159 removed, 168 unchanged (65% of the section changed)

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When making an investment decision with respect to our common stock, you should also refer to the other information contained in this Annual Report on Form 10-K, including our Consolidated Financial Statements and the related notes.

Risks Related to Our Indebtedness and Liquidity

Our ability to extend or refinance maturing indebtedness is uncertain and could materially affect our liquidity, financial condition, and operations.

On November 7, 2025, the Company entered into the fourth amendment to our Credit Agreement (the "Fourth Amendment").

The Fourth Amendment extended the maturity dates for our term loans and revolving credit facility by six months, from March 4, 2027 to September 3, 2027, and we are actively working to secure long-term refinancing for our significant total borrowings, which was approximately $170.2 million as of December 28, 2025.

Our ability to meet our liquidity and working capital needs depends on our ability to extend or refinance this maturing indebtedness;

however, we may not be able to obtain further extensions or refinancing on acceptable terms, or at all.

Our ability to secure additional extensions or to refinance maturing indebtedness depends on our future cash flows, financial performance, compliance with the covenants in our credit facility, lender consent, and prevailing credit market conditions.

Turmoil in the financial markets can severely restrict the availability of funds for borrowing and may make it more difficult or costly for us to raise capital.

There can be no assurance that financing or refinancings will be available or that, if available, will be on terms acceptable to us.

If we cannot extend or refinance the indebtedness when due, our lenders could accelerate repayment, and we may be required to repay the debt, sell assets at unfavorable prices, seek alternative financing on unfavorable terms, reduce or defer strategic initiatives or capital expenditures, or pursue other actions that could have a material adverse effect on our business, financial condition, cash flows, and results of operations.

If we are unable to service our debt or comply with the financial and other covenants in our credit facility, our financial condition could be negatively affected.

A substantial portion of our cash flows are dedicated to debt service payments.

Our business may not continue to generate cash flow from operations in the future that is sufficient to meet our debt service, working capital and capital expenditure needs.

Additionally, our current credit facility contains financial and other restrictive covenants, including among others, a total net leverage ratio covenant.

A breach of these covenants could result in default, and if such default is not cured or waived, our lenders could accelerate our debt and declare it immediately due and payable.

If this occurs, we may not be able to repay or borrow sufficient funds to refinance the debt.

We routinely seek to refinance and/or extend the maturity of our indebtedness.

Financing may not be available to us due to factors beyond our control, and even if financing is available, it may not be on acceptable terms.

A default under our credit facility could cause a material adverse effect on our financial condition, including our liquidity and cash flows.

Risks Related to Our Business

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The Company is currently undergoing a significant transformation.

In 2023, we launched our "North Star" business strategy.

Developed under new leadership, this five-point plan is designed to drive long-term shareholder value and enhance Red Robin's competitive positioning.

The North Star five-point plan focuses on transforming to an operations focused restaurant company;

elevating the Guest experience;

removing costs and complexity;

optimizing Guest engagement;

and driving growth in comparable restaurant revenue and unit level profitability, and delivering financial commitments.

These strategies and related initiatives may not result in increased traffic and sustained higher sales, which are important to achieving our strategic objectives.

Changes to our operations structure and compensation, service model, menu, Guest experience and cooking platform, supply chain and vendors, marketing and branding strategies, loyalty program, technology, and Guest engagement may not achieve the business growth and results we expect, which may negatively affect Guest satisfaction, Guest traffic, sales, profits, or liquidity.

In fiscal 2025, we appointed David Pace as our President and Chief Executive Officer and subsequently launched our "First Choice" plan, which is intended to drive long-term stockholder value and position Red Robin as the first choice for guests, team members, and investors.

The First Choice plan includes initiatives to hold serve, drive traffic, find money, fix restaurants, and win together with a high performance environment.

These strategies and related initiatives may not result in increased traffic and sustained higher sales or decreased debt and expenses, all of which are important to drive long-term stockholder value.

Changes to our operations, capital structure, debt structure, restaurant portfolio, marketing strategies, technology, and restaurants, among other initiatives, may not achieve the business growth and results we expect, which may negatively affect guest satisfaction, guest traffic, sales, profits, or liquidity.

Our business and desired results depend upon our ability to continue to grow and evolve through various important strategic initiatives.

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The global and domestic economic and geopolitical environment affects the restaurant industry and may negatively affect us directly and indirectly through our customers, distributors, and suppliers.

These conditions include unemployment, weakness in the housing markets, downtrend or delays in residential or commercial real estate development, volatility in the U.S.

stock market and in other financial markets, inflationary pressures, wage rates, tariffs and other trade barriers, disputes and tensions, reduced access to credit or other economic factors that may affect consumer confidence.

As a result, our Guests may be apprehensive about the economy and reduce their level of discretionary spending.

These conditions include unemployment, weakness in the housing markets, an economic recession or slowdown, volatility in the U.S.

stock market and in other financial markets, inflationary pressures, wage rates, tariffs imposed on commodities and other trade barriers, global disputes and tensions, interest rate fluctuations and reduced access to credit or other economic or geopolitical factors that may affect consumer confidence.

Additionally, periods of federal government shutdown or significant slowdowns in government operations may affect consumer confidence and delay routine government functions on which we and our suppliers rely.

As a result of these conditions, our guests may be apprehensive about the economy and reduce their level of discretionary spending or our operations may be negatively affected.

This could affect the frequency with which our guests choose to dine-out or the amount they spend on meals, thereby decreasing our revenues and potentially negatively affecting our operating results.

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We may also seek access to the debt or equity capital markets.

Any additional capital raised through the sale of equity may dilute our shareholders ownership percentages and could also result in a decrease in the market value of our securities.

Our capital deployment strategies include but are not limited to, maintaining existing restaurants and infrastructure, paying down debt, executing on our long-term transformation strategy, and improving existing restaurants.

Any additional capital raised through the sale of equity may dilute our stockholders' ownership percentages and could also result in a decrease in the market value of our securities.

Our capital deployment strategies include but are not limited to, improving existing restaurants and infrastructure, investing in new technology, paying down debt, investing in marketing to grow traffic, and executing on our long-term transformation strategy.

If we experience decreased cash flow from operations, or an inability to access new capital on acceptable terms with acceptable interest rates if needed, our ability to fund our operations and planned initiatives, and to take advantage of growth opportunities, may be delayed or negatively affected.

In addition, these disruptions and any resulting negative effect on our net income, cash flows, or other relevant financial performance metrics under our revolving credit facility could affect our ability to borrow or comply with our covenants under that facility.

If we are unable to service our debt or comply with the financial and other covenants in our credit facility, our financial condition could be negatively affected.

As of December 29, 2024, the total principal amount of our debt was $189.5 million.

A substantial portion of our cash flows are dedicated to debt service payments.

Our business may not continue to generate cash flow from operations in the future sufficient to meet our debt service, working capital and capital expenditure needs.

Additionally, our credit facility contains financial and other restrictive covenants, including among others, a total net leverage ratio covenant.

A breach of these covenants could result in default, and if such default is not cured or waived, our lenders could accelerate our debt and declare it immediately due and payable.

If this occurs, we may not be able to repay or borrow sufficient funds to refinance the debt.

Even if financing is available, it may not be on acceptable terms.

A default under our credit facility could cause a material adverse effect on our financial condition, including our liquidity and cash flows.

A privacy or security breach involving our information technology systems, or the failure of our data security measures could interrupt our business, damage our reputation, and negatively affect our operations and financial condition.

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Compliance with these requirements may result in cost increases due to necessary system changes and the development of new administrative processes, and if we fail to comply, we could be exposed to risks of fines, investigations, litigation, and disruption of our operations.

In the ordinary course of our business, we receive and maintain certain personal and payment information from our Guests, Team Members, and vendors.

Third parties may have the technology or know-how to breach the security of this personal and payment information.

Although we employ cybersecurity measures to try to prevent cybersecurity incidents, we have in the past and could be impacted by cyber incidents or data breaches.

We have in the past been subject, and we could in the future become subject, to claims, lawsuits, or other proceedings for purportedly fraudulent transactions arising from the unauthorized use of personal and payment information from our Guests, Team Members, and vendors.

Any such cyber incident or data breach could disrupt the operation of our restaurants, adversely affect our reputation, and result in significant unplanned losses and expenditures.

Our software and information technology systems, as well as those of third parties on which we rely, may contain material vulnerabilities.

In the ordinary course of our business, we collect, store, and process personal and payment information relating to our guests, team members, and vendors.

We also collect, store, and process sales data, financial information, human resources information, and other sensitive business data.

Despite the cybersecurity measures we have implemented, we have experienced cybersecurity incidents in the past and may experience future incidents, including data breaches, phishing attacks, or other unauthorized access to our systems or those of our third-party service providers.

In addition, the rapid evolution and increased adoption of artificial intelligence technologies may intensify cybersecurity risks.

Our efforts to identify and remediate system vulnerabilities may not prevent or promptly resolve such incidents, which could result in the theft, loss, or unauthorized disclosure of confidential or proprietary information, disruption of restaurant or corporate operations or our supply chain, loss of guest confidence, reputational harm, and significant remediation, legal, regulatory, or other costs.

We maintain a separate insurance policy covering cyber security risks and such insurance coverage may, subject to policy terms and conditions, cover certain aspects of cyber risks, but is subject to a retention amount and may not be applicable to a particular incident or otherwise may be insufficient to cover all our losses beyond any retention.

Further, in light of recent court rulings and amendments to policy forms, there is uncertainty as to whether traditional commercial general liability policies will be construed to cover the expenses related to a cyber-attack and breaches if credit and debit card information is stolen.

Because of the number of credit card transactions we process, we are required to maintain the highest level of PCI Data Security Standard compliance at our Restaurant Support Center and Company-owned restaurants.

Because of the number of credit card transactions we process, we are required to maintain PCI Data Security Standard compliance at our Restaurant Support Center and Company-owned restaurants.

If we do not maintain the required level of PCI compliance, we could be subject to costly fines or additional fees from the card brands that we accept or lose our ability to accept those payment cards.

Our franchisees are separate businesses that have different levels of compliance required depending on the number of credit card transactions processed.

If our franchisees fail to maintain the appropriate level of PCI compliance or they experience a security breach, it could negatively impact their business operations, and we could face a loss of or reduction in royalties or other payments they are required to remit to us and it could adversely affect our reputation and Guest confidence.

If our franchisees fail to maintain the appropriate level of PCI compliance or they experience a security breach, it could negatively impact their business operations, and we could face a loss of royalties or other payments they are required to remit to us, and it could adversely affect our reputation and guest confidence.

If there is a material failure in our information technology systems, our business could be negatively affected, and our systems may be inadequate to support our future growth strategies.

We rely heavily on information technology systems in all aspects of our operations including our restaurant point-of sale systems, financial systems, marketing programs, employee engagement, supply chain management, cyber-security, and various other processes and transactions.

Our ability to effectively manage and run our business depends on the reliability and capacity of our information technology systems, including technology services and systems for which we contract from third parties.

These systems and our business needs continue to evolve and require upgrading and maintenance over time, consequently requiring significant future commitments of resources and capital.

Some of our information technology systems are aging,

and while we have been evolving and improving our information technology systems, if we do not timely or adequately complete this work or if we have problems transitioning to upgraded or replacement systems, or any other failure to maintain continuous and secure information technology systems, we could experience cybersecurity incidents, system downtime, or other adverse effects that negatively impact our business.

We cannot provide assurance that the measures we take to evolve and improve our information technology systems will be sufficient to prevent future cyber-attacks, system failures, or data or information loss.

In the past, we have experienced the negative impacts of a breach of a service providers' network.

Any breach of our or our service providers' networks, or other vendor systems, may result in the loss of confidential business and financial data, misappropriation of our consumers', users' or employees' personal information or a disruption of our business.

Any of these outcomes could have a material adverse effect on our business, including unwanted media attention, impairment of our consumer and customer relationships, damage to our reputation, resulting in lost sales and consumers, fines, lawsuits, government enforcement actions (for example, investigations, fines, penalties, audits and inspections) or significant legal and remediation expenses.

Our software or information technology systems, or those of our employees or of third parties upon who we rely to operate our business, may have material vulnerabilities and, despite our efforts to identify and remediate these vulnerabilities, our efforts may not be successful or we may experience delays in developing and deploying remedial measures designed to address any such identified vulnerabilities.

It may be expensive and time-consuming to remediate material vulnerabilities, and our operations, reputation, and financial performance may be adversely impacted if we are not able to successfully and promptly remediate such vulnerabilities.

Further, like other companies in the restaurant industry, we have in the past experienced, and we expect to continue to experience, cyber-attacks, including phishing attacks, and other attempts to breach or gain unauthorized access to our systems.

However, despite the precautions we take to mitigate the risks of such events, an attack on our information technology systems, or those of third parties with which we do business, could result in theft or unauthorized disclosure of our proprietary or confidential information or a breach of confidential customer, supplier or employee information.

Such events could impair our ability to conduct our operations or cause disruptions to our supply chain, which could have an adverse impact on our financial condition and harm our reputation.

Additionally, such an event could expose us to regulatory sanctions or penalties, lawsuits or other legal action or cause us to incur legal liabilities and costs, which could be significant, to address and remediate the effects of an attack and related security concerns.

The insurance coverage we maintain may be inadequate to cover claims or liabilities relating to a cybersecurity attack.

We rely heavily on information technology systems in all aspects of our operations including our restaurant point-of sale systems, financial systems, marketing programs and guest engagement, team member engagement, supply chain management, cybersecurity, and various other processes and transactions.

We also use information technology systems to process financial information and results of operations for internal reporting purposes and to comply with regulatory financial reporting, legal and tax requirements.

If these systems suffer severe damage, disruption or shutdown and our business continuity plans, or those of our vendors, do not effectively resolve the issues in a timely manner, we could experience delays in reporting our financial results, which could result in lost revenues and profits, as well as reputational damage.

Furthermore, we depend on information technology systems and personal information collection for digital marketing, digital commerce, consumer engagement and the marketing and use of our digital products and services.

We also rely on our ability to engage in electronic communications throughout the world between and among our employees as well as with other third parties, including customers, suppliers, vendors, and consumers.

Any interruption in information technology systems may impede our ability to engage in digital commerce and result in lost revenues, damage to our reputation, and loss of users.

Moreover, these technology services and systems, communication systems, and electronic data could be subject or vulnerable to damage or interruption from earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses, loss of data, data breaches, or other attempts to harm our systems.

A failure of these systems to operate effectively, problems with transitioning to upgraded or replacement systems, or any other failure to maintain a continuous and secure information technology network for any of the above reasons could result interruption and delays in Guest services, adversely affect our reputation, and negatively impact our results of operations.

Our ability to operate effectively depends on the reliability, capacity, and security of these systems, including systems operated by third parties.

In recent years, we have replaced large portions of our technology hardware.

However, some of our information technology systems are aging, and while we continue to invest in upgrades and replacements, these efforts are complex, costly, and time-consuming.

In addition, our systems and data may be vulnerable to damage or interruption from power outages, telecommunications failures, natural disasters, terrorism, cyber attacks or other events beyond our control.

If these systems suffer severe damage, disruption, or shutdown or if we fail to timely or successfully implement system upgrades, experience difficulties transitioning to new systems, encounter system failures, outages, or security vulnerabilities, or if our vendors experience similar issues, we could experience operational disruptions, delays in financial reporting, lost revenues, increased cost, or reputational harm.

This could be further exacerbated if our business continuity or disaster recovery plans, or those of our vendors, are ineffective and we fail to resolve issues in a timely manner.

Any such events could materially adversely affect our business, financial condition, and results of operations.

We have adopted and use artificial intelligence ("AI") and other automated technologies in various aspects of our business, including marketing, guest engagement, labor management, forecasting, and administrative functions.

These technologies are complex and rapidly evolving, and their use involves risks and uncertainties.

AI-based tools may produce inaccurate, incomplete, or biased outputs, may not perform as intended, or may rely on data that is flawed or outdated, which could result in ineffective decision-making or other harms.

The use of AI may increase our exposure to cybersecurity, data privacy, and regulatory risks, particularly as legal standards governing AI continue to develop.

If we do not effectively adopt and integrate these emerging technologies as quickly or successfully as our competitors, we may be at a competitive disadvantage, experience higher costs, or be less effective in engaging guests and operating our business.

Our marketing and branding strategies to attract, engage, and retain our guests, including recent and future changes to our loyalty program, may not be successful, which could negatively affect our business.

While we routinely refine our communication strategies to effectively target and compete for customers, these strategies may not prove to be successful.

We routinely refine our communication, advertising, branding, and other marketing strategies to effectively target and compete for customers, but there is no assurance these strategies will be effective.

The Red Robin Royalty™ loyalty program has historically contributed to sales and guest count growth.

We launched a new loyalty program in fiscal 2024 which transitioned to a points-based program to reward our most loyal Guests, but we cannot guarantee this new loyalty program will be a success.

If our advertising, branding, and other marketing initiatives do not drive visits from consumers, we may not achieve the expected levels of restaurant sales or Guest traffic, potentially impacting our financial results negatively.

Furthermore, the competitive landscape presents a challenge, as some competitors boast larger marketing resources and more extensive national strategies, potentially limiting our ability to successfully compete against these well-established programs.

We continue to evolve this program, including the structure, rewards, and guest participation requirements.

These changes may not achieve their intended objectives and could result in reduced guest engagement, lower visit frequency, or decreased brand loyalty.

We increasingly rely on data, analytics, and digital tools to inform our marketing, promotional, and guest engagement strategies, including micro-targeting, personalization, and measurement of marketing effectiveness.

These strategies depend on the accuracy, completeness, and timeliness of the data we collect and the assumptions and models we use to analyze that data.

If our data is incomplete, inaccurate, or not effectively analyzed, or if our marketing strategies based on such data do not resonate with guests, our marketing investments may not generate the expected levels of guest traffic or sales.

In addition, our ability to use guest data is subject to evolving privacy laws, regulatory requirements, platform policies, and consumer preferences, which may limit data collection, sharing, or usage and reduce the effectiveness of targeted marketing initiatives, and any failure to comply could subject us to liability.

Damage to our brand image or reputation, including due to unfavorable social and digital media, could adversely impact our business.

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In addition, competitors' use of significant advertising and food discounting could influence our guests' dining choices.

Further, changing health or dietary preferences may cause consumers to avoid our products in favor of alternative foods.

Further, changing health or dietary preferences and current and new medical advancements, such as weight loss medications, may cause consumers to avoid our products in favor of alternative foods or consume less of our products.

Consumer preference could be affected by health concerns related to the consumption of beef, chicken, or other food products on our menu, or negative publicity concerning food quality, nutrition, illness, or injury, even if not valid, may negatively affect demand for our food and could result in decreased guest traffic in our restaurants.

The food service industry as a whole rests on consumer preferences and demographic trends at the local, regional, and national levels.

New information or changes in dietary, nutritional or health guidelines, among other things, may affect consumer choice and cause consumers to significantly alter their dining choices in ways that adversely affect our sales and profitability.

New information or changes in dietary, nutritional or health guidelines and preferences, among other things, may affect consumer choice and cause consumers to significantly alter their dining choices in ways that adversely affect our sales and profitability.

We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases, and risks related to renewal.

As of December 28, 2025, 381 of our 385 Company-owned restaurants are located on leased premises.

We have in the past and may in the future engage in sale-leaseback transactions, which have and may in the future increase the number of our leased properties.

During fiscal 2023 and 2024, we completed three such transactions, selling and simultaneously leasing back an aggregate of 28 previously owned properties.

We have in the past, and may in the future, engage in sale-leaseback transactions, which could further increase the number of our leased properties.

Payments under our operating leases account for a significant portion of our operating expenses.

We cannot be certain that we will maintain a level of cash flow from operating activities sufficient for us to pay our operating lease expenses.

Additional sites that we lease are likely to be subject to similar long-term non-cancelable leases.

In connection with closing restaurants, we may nonetheless be committed to perform our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term.

In addition, as each of our leases expires, there can be no assurance we will be able to renew our expiring leases after the expiration of all remaining renewal options, either on commercially acceptable terms or at all.

We have in the past and may in the future close restaurants, including as we continue to evaluate certain underperforming restaurants.

In connection with closing restaurants, we may nonetheless be committed to performing our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term, incurring termination fees, and other significant one-time cash expenditures.

Additionally, closing restaurants has in the past and may in the future result in other significant non-cash charges, including impairments.

The Company has a potential contingent lease liability for lease payments related to certain franchisees' lease arrangements.

This potential contingent lease liability could increase if the Company sells restaurants to franchisees, as we may be required to remain responsible for lease payments for certain restaurants to the extent the purchasing franchisee defaults on the lease.

Upon such default, we may be required to make lease payments and seek recourse against the franchisee or agree to repayment terms.

In addition, as our leases expire, there can be no assurance we will be able to renew our expiring leases after the expiration of renewal options, either on commercially acceptable terms or at all.

As a result, we may incur additional costs to operate our restaurants, including increased rent and other costs related to the negotiation of terms of occupancy of an existing leased premise.

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Changes in consumer buying patterns, particularly due to declines in traffic near our leased locations, and increases in online sales, may affect our financial condition and results of operations.

The success of our restaurants depends in large part on leased locations.

Our restaurants are primarily located near high density retail areas such as regional malls, lifestyle centers, big box shopping centers, and entertainment centers.

We depend on a high volume of visitors at these centers to attract Guests to our restaurants.

As demographic and economic patterns change, current locations may or may not continue to be attractive or profitable.

Online sales continue to increase and negatively impact consumer traffic at traditional "brick and mortar" retail sites located in regional malls, lifestyle centers, big box shopping centers and entertainment centers.

A decline in development or closures of businesses in these settings or a decline in visitors to retail areas near our restaurants could negatively affect our restaurant sales.

In addition, we compete with other restaurants and retail establishments for prime real estate locations.

Desirable locations for the relocation of existing restaurants may not be available at an acceptable cost, due in part to the inability to easily terminate a long-term lease.

In recent years, we’ve made investments in off-premises sales, including delivery, pickup options, and catering, to attract Guests who are looking for convenience or want to enjoy our food off-premises.

The success of our restaurants depends in large part on the performance of our leased locations, which are generally situated in high-traffic retail and entertainment areas such as malls, lifestyle centers, and shopping centers.

Our restaurants rely on customer traffic generated by these surrounding locations.

Changes in demographic, economic, or consumer behavior patterns, including reduced foot traffic or business closures in these areas, may make certain locations less attractive or profitable.

In addition, the continued growth of online shopping has negatively affected traffic at many traditional "brick and mortar" retail centers, which could reduce guest visits to our restaurants.

Our ability to relocate underperforming restaurants may also be limited by the availability and cost of suitable alternative sites and by our inability to easily terminate our long-term lease commitments.

We have invested in off-premises sales, including delivery, pickup options, and catering, to attract guests who are looking for convenience or want to enjoy our food off-premises.

While we plan to continue to invest in the growth of our off-premises sales, there can be no guarantee we will maintain or increase such sales.

Off-premises sales could also cannibalize dine-in sales, or our systems and procedures may not be sufficient to handle off-premises sales, which may require additional investments in technology or people.

Additionally, a large percentage of delivery from our restaurants is through third party delivery companies.

These third-party delivery companies require us to pay them a commission, which lowers our profit margin on those sales, and delivery drivers may make errors, fail to make timely deliveries, damage our food or poorly represent our brand, which may lead to customer disappointment, reputational harm and unmet sales expectations.

Any bad press, whether true or not, regarding third party delivery companies or their business model may negatively impact our sales.

Off-premises sales could also cannibalize dine-in sales, or our systems and procedures may require additional investments in technology or people.

A significant portion of our delivery orders are fulfilled through third-party delivery providers, which charge commissions and over whom we have limited control.

Delivery drivers may make errors, fail to make timely deliveries, damage our food or poorly represent our brand, which may lead to guest disappointment, reputational harm or unmet sales expectations.

While we have introduced an alternative to third party delivery by offering an online Company platform to collect orders and outsource the "last mile" of delivery, we may not be able to convert guests to our platform and that model remains subject to some of the same risks.

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Various factors beyond our control, including adverse weather conditions, governmental regulation and monetary policy, new or increased trade barriers and import tariffs (including retaliatory trade actions), product availability, recalls of food products, and seasonality, as well as the effects of the current macroeconomic environment on our suppliers, may affect our commodity costs or cause a disruption in our supply chain.

In an effort to mitigate some of this risk, we enter into fixed price agreements on some of our food and beverage products, including certain proteins, produce and cooking oil.

As of the end of fiscal 2024, approximately 42% of our estimated fiscal 2025 annual food and beverage purchases will be covered by fixed price contracts, most of which are scheduled to expire at various times through 2025.

Changes in the price or availability of commodities for which we do not have fixed price contracts could have a material adverse effect on our profitability.

Expiring contracts with our food suppliers could also result in disruptions in relationships or unfavorable renewal terms and therefore increase costs associated with these suppliers or may necessitate negotiations with alternate suppliers.

We may be unable to obtain favorable contract terms with suppliers or adjust our purchasing practices and menu prices to respond to changing food costs, and a failure to do so could negatively affect our operating results.

We seek to mitigate commodity price risk through a combination of purchasing strategies, including fixed-price contracts for certain food and beverage items.

However, these arrangements may not fully offset future cost increases and typically cover only a portion of our total commodity needs for limited time periods.

As contracts expire, we may be unable to renew them on favorable terms, which could result in higher costs, changes in supplier relationships, or the need to source products from alternative suppliers.

In addition, we may not be able to fully pass increased commodity costs on to guests through menu pricing or other actions without adversely affecting guest traffic.

If we are unable to effectively manage commodity cost increases or supply disruptions, our results of operations and profitability could be adversely affected.

We may experience interruptions in the delivery of food and other products from third parties.

Our restaurants depend on frequent deliveries of fresh produce, food, beverage, and other products.

This subjects us to the risk of interruptions in food and beverage supplies that may result from a variety of causes including, but not limited to, outbreaks of food-borne illness, disruption of operation of production facilities, financial difficulties, including bankruptcy of our suppliers or other unforeseen circumstances, especially where a product comes from a single or small number of suppliers.

Our restaurants depend on frequent deliveries of fresh produce, food, beverages, and other products.

This subjects us to the risk of interruptions in food and beverage supplies that may result from a variety of causes including, but not limited to, outbreaks of food-borne illness, disruption of operation of production facilities, transportation disruptions or delays, financial difficulties, including bankruptcy of our suppliers or other unforeseen circumstances, especially where a product comes from a single or small number of suppliers.

Such shortages could adversely affect our revenue and profits.

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Aging hardware and outdated systems, as well as the process to upgrade or replace hardware and systems, increases the risk of system failures, business disruptions, and degraded guest experiences.

Additionally, we are closely monitoring advancements in artificial intelligence (AI) and its potential applications within our organization and business strategy.

Key risks include ethical concerns in AI and Machine Learning models and liability associated with AI-driven decisions impacting customers and operations.

We may expand our restaurant base as a component of our long-term growth, and our ability to open and profitably operate new restaurants is subject to factors beyond our control.

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The expansion of our restaurant base depends upon numerous factors, some of which are out of our control, including the cost and availability of capital, the ability to attract qualified operating team members to staff new restaurants, the ability to secure available and suitable restaurant sites on favorable lease and construction terms, timely adherence to development schedules, and competition that may affect consumer spending.

New or less mature restaurants, once opened, may vary in profitability and levels of operating revenue for six months or more, and there is no assurance new restaurants will attain operating results similar to those of existing restaurants.

New or less mature restaurants, once opened, may vary in profitability and levels of operating revenue for six months or more, and there are no assurance new restaurants will attain operating results similar to those of existing restaurants.

Delays or failures in opening new restaurants, or the inability to profitably operate them once opened, could materially and adversely affect our planned growth.

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Many of our existing restaurants are mature and require capital expenditures for maintenance and improvement to remain competitive and maintain our brand standard.

Additionally, we have evaluated and may undertake in the future a restaurant renovation program, including upgrading interior ambience and exterior appeal of our restaurants.

Under our First Choice plan, we have begun, and plan to continue, investing in our restaurants by addressing critical deferred maintenance needs, such as flooring updates, internal finishings, furniture repairs, and exterior improvements that directly impact guest perceptions and experience, as well as in new technology.

Additionally, we have evaluated and may undertake in the future a more substantial restaurant renovation program.

These initiatives involve significant capital expenditures.

If we do not make these capital investments or do not achieve a return on the investment, our business, profitability, and our ability to compete effectively could be harmed.

We are subject to the risks presented by acquisitions or refranchising.

As part of our expansion efforts, we have acquired some of our franchised restaurants in the past.

In the future, we may, from time to time, consider opportunistic acquisitions or dispositions of restaurants.

We may in the future pursue refranchising with quality operators in certain identified markets.

Any future acquisitions or dispositions will be accompanied by the risks commonly encountered in acquisitions.

These risks include among other things:

• the difficulty of integrating operations and Team Members;

• the potential disruption to our ongoing business;

• the potential distraction of management;

• the effect on selling, general, and administrative expenses and earnings;

• the inability to maintain uniform standards, controls, procedures, and policies;

• the impairment of relationships with Team Members and Guests as a result of changes in ownership and management.

If we do not make these capital investments or do not achieve a return on the investment, our business, financial condition, and our ability to compete effectively could be harmed.

Our tactical refranchising initiatives may not be completed on favorable terms or completed at all and may not result in the anticipated financial benefits.

As part of our First Choice plan, we are evaluating tactical refranchising opportunities to optimize our overall financing structure and strengthen our balance sheet.

Tactical refranchising initiatives require significant management time and resources and may divert attention from day-to-day operations and other strategic priorities.

The timing, pricing, and structure of any tactical refranchising transactions depend on market conditions and the availability and interest of qualified franchisees.

Delays in execution, unexpected costs, or challenges in integrating franchisees into our system could limit the effectiveness of tactical refranchising efforts.

Any such transactions are expected to result in a shift from Company-owned restaurant revenues to franchise royalty income.

If our tactical refranchising initiatives are unsuccessful or do not achieve intended objectives, including improvements in liquidity and reductions in general and administrative expenses and long term debt, our business, financial condition, and results of operations could be materially adversely affected.

We are subject to the risks presented by acquisitions or dispositions of restaurants.

In the past, we have acquired franchised restaurants and disposed of restaurants.

In the future, we may, from time to time, consider opportunistic acquisitions or dispositions of restaurants beyond the tactical refranchising initiatives described above.

Any future acquisitions or dispositions will be accompanied by the risks commonly encountered in such transactions, including difficulty integrating operations and team members, potential disruption to our ongoing business, potential distraction of management, impact on the Company's financial condition, and the impairment of relationships with team members and guests as a result in changes in ownership and management.

The large number of Company-owned restaurants concentrated in the Western United States makes us susceptible to changes in economic and other trends in that region.

As of December 29, 2024, a total of 166 or 41% of our 407 Company-owned restaurants, representing 51% of restaurant revenues, were located in the Western United States (i.e., Arizona, California, Colorado, Nevada, Oregon, Idaho, New Mexico, Utah, and Washington state).

As of December 28, 2025, a total of 162 or 42% of our 385 Company-owned restaurants, representing 50% of restaurant revenues, were located in the Western United States (i.e., Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, and Washington).

As a result of our geographic concentration, negative publicity regarding any of our restaurants in the Western United States, as well as regional differences in the legal, regulatory, and litigation environment, could have a material adverse effect on our business and operations, as could other regional occurrences such as local strikes, regional cost-of-living increases, energy shortages, or increases in energy prices, droughts, earthquakes, fires, or other natural disasters.

We rely on our management team for the development and execution of our business strategy and the loss of a member of our management team could negatively affect our operating results.

We implemented changes to our management team to support the Company’s new “North Star” five-point plan.

Our management team is central to our success and difficult to replace.

We may be unable to retain our management team or attract new highly qualified members, particularly if we do not offer competitive employment terms.

Turnover on our management team or the failure to implement an appropriate succession plan could disrupt our business and prevent us from achieving our business strategy and initiatives, which could adversely affect our operating results.

If we are unable to successfully recruit, retain, and motivate qualified restaurant management and operations Team Members in an increasingly competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance.

Our ability to attract, retain, and motivate qualified management and operating Team Members is central to providing the desired Guest and Team Member experience in our restaurants and delivering on our business strategy.

Qualified management and operations Team Members are currently in high demand.

Labor shortages in our industry and in the broader economy have disrupted, and may further disrupt, our ability to maintain adequate staffing levels at our restaurants.

Increasing competition in the market for Team Members may increase our labor costs, including by requiring us to take additional measures to ensure that our compensation and benefits for Team Members remain competitive within the restaurant industry and with other industries that compete with us for workers, which could materially increase our expenses, or take measures to limit the impact of staffing shortages on the Guest experience.

From time to time, we make capital expenditures for, and commit management resources towards, efforts aimed at improving our competitiveness and our ability to attract and retain qualified management and operating Team Members, such as our recently launched Market Partner and Managing Partner compensation programs designed to reward these Team Members based on the profits of the restaurants they oversee.

If we are unable to attract and retain qualified people, our restaurants could be short staffed, we may be forced to incur overtime expenses, hourly Team Member turnover could increase, and our ability to operate our restaurants effectively could be limited, and the Guest experience could be negatively affected, leading to a decline in traffic and sales, which could materially adversely affect our financial performance.

Our success depends in part on the contributions of our management team and other key personnel to develop and execute our business strategy.

We recently experienced a transition in leadership, and the effects of this transition, or any future leadership changes, could disrupt our business and adversely affect our performance.

Leadership transitions, even when planned, involve inherent risks, including potential disruptions to strategic continuity, loss of institutional knowledge, changes in management priorities, and challenges associated with integrating new leaders into the organization.

The process of recruiting leadership is time-consuming and competitive and may divert management’s attention, and there can be no assurance we will be successful in identifying and retaining qualified candidates on acceptable terms or within desired timeframes.

Additional turnover on our management team or the failure to implement an appropriate succession plan could disrupt our business and prevent us from achieving our business strategy and initiatives, which could adversely affect our operating results.

If we are unable to successfully attract, retain, and motivate qualified restaurant management and operations team members in a competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance.

Our ability to attract, retain, and motivate qualified management and operations team members is central to providing the desired guest and team member experience in our restaurants and delivering on our business strategy.

The market for qualified talent continues to be competitive, which could increase our labor costs if we need to take additional measures to provide competitive wages, benefits, and workplace conditions.

Changes in immigration laws and regulations could decrease the pool of

candidates with legal work authorizations, causing disruption in the workforce for all companies that rely on hourly workers.

If we are unable to recruit, retain and motivate qualified people, our restaurants could be short staffed, we may be forced to incur overtime expenses, hourly team member turnover could increase, and our ability to operate our restaurants effectively could be limited, and the guest experience could be negatively affected, leading to a decline in traffic and sales, which could materially adversely affect our financial performance.

Further, an inability to adequately monitor and proactively respond to any potential team member dissatisfaction could lead to poor guest satisfaction, higher turnover, litigation and unionization, which could impact our ability to effectively operate and grow our business and revenues.

Our ability to attract, motivate, and retain our management team and key personnel may be affected by the market price of our common stock and the availability of shares under our equity compensation plan, and we may need to provide alternative compensation incentives.

Equity-based compensation is an important component of our overall compensation strategy for our management team and key personnel.

The market price and volatility of our common stock may affect the value or perceived value of equity awards and our ability to effectively use equity compensation to attract, motivate, and retain qualified personnel.

Low stock price levels or significant volatility may require us to grant a greater number of shares to achieve intended compensation levels, which could increase dilution to existing stockholders.

Our ability to grant equity-based compensation is subject to the availability of shares under our 2024 Performance Incentive Plan.

If sufficient shares are not available, or if stockholder approval is required and not obtained to increase the number of authorized shares under such plan, our ability to continue granting equity awards could be limited and we may need to rely on cash compensation or alternative incentives to remain competitive, which could increase our compensation expense and adversely affect our operating results.

Our results of operations may fluctuate significantly due to various risks and unexpected circumstances, including adverse weather conditions, natural disasters, climate change, pandemics, catastrophic events, and other factors outside our control that could increase costs, disrupt our supply change, and impact seasonality, among other things.

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Franchisees are independent entities and are not our employees, partners, or affiliates.

If our franchised restaurant base grows due to tactical refranchising initiatives, then we may rely more heavily on franchisees to operate restaurants in compliance with our brand standards, operating procedures, and applicable law.

If our franchisees are not successful, then our business, results of operations, and reputation could be disproportionately adversely affected by the relative scale of such franchise operations.

We share with our franchisees what we believe to be best practices in the restaurant industry;

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We are subject to federal and state laws that regulate the offer and sale of franchises and aspects of the licensor-licensee relationship.

Further, there have been historical actions before the National Labor Relations Board (NLRB) where it was alleged

that a parent company could be held liable for the actions of its franchisees, including potentially jointly liable for labor and wage violations by its franchisees.

Failure to comply with the laws and regulations governing our franchisee relationships or adverse decisions similar to the above-described NLRB actions could subject us to liability for actions of the franchisees, or expose us to liability to franchisees, or fines and penalties for non-compliance.

Further, there have been historical actions before the National Labor Relations Board ("NLRB") where it was alleged that a parent company could be held liable for the actions of its franchisees, including potentially jointly liable for labor and wage violations by its franchisees.

Failure to comply with the laws and regulations governing our franchisee relationships

or adverse decisions similar to the above-described NLRB actions could subject us to liability for actions of the franchisees, or expose us to liability to franchisees, or fines and penalties for non-compliance.

Food safety and food-borne illness concerns, and any related unfavorable publicity could have an adverse effect on our business.

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coli, norovirus, listeria, hepatitis A, salmonella, or trichinosis, as well as other food safety issues including food tampering or contamination, at one of our or a franchisee's restaurants, could adversely affect our reputation and have a negative impact on our sales.

Even instances of food-borne illness, food tampering or food contamination occurring solely at our competitors’ restaurants, suppliers or distributors (even if we do not work with them) could result in negative publicity about the food service industry generally and adversely impact our sales.

The occurrence of food safety issues could also adversely affect the price and availability of affected ingredients, resulting in higher costs and lower margins.

Health concerns relating to the consumption of beef, chicken, or other food products could affect consumer preferences and could negatively affect our results of operations.

Consumer preferences could be affected by health concerns about food-related illness, the consumption of beef (which is the key ingredient in many of our menu items), or negative publicity or publication of government or industry findings concerning food quality, illness, and injury.

Further, consumers may react negatively to reports concerning our food products or health or other concerns or operating issues stemming from one or more of our restaurants.

Such negative publicity, whether or not valid, may negatively affect demand for our food and could result in decreased Guest traffic to our restaurants.

A decrease in Guest traffic to our restaurants as a result of these health concerns or negative publicity or as a result of a change in our menu or concept could materially harm our business and negatively affect our profitability.

Our business could be adversely affected by increased labor costs, including costs related to the increase in minimum wage and new health care laws.

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Increased labor costs, whether due to our business model, competition, unionization, increased minimum and tip wage, state unemployment rates, employee benefits costs, or otherwise, may adversely impact our operating expenses.

A considerable amount of our restaurant Team Members are paid at rates related to the federal, state, or local minimum wage.

Further, we have a substantial number of restaurants located in states or municipalities where the minimum wage is greater than the current federal minimum wage, including California, Washington, Oregon, Colorado, and New York.

For example, California enacted legislation that increased its minimum wage through a series of annual rate increases, from $10.50 an hour in January 2017 to $16.50 an hour in January 2025, and some California localities currently mandate wages higher than the state minimum.

A considerable amount of our restaurant team members is paid at rates related to the federal, state, or local minimum wage.

Because we employ a large workforce, any wage increase and/or expansion of benefit 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.

In the past, many of our eligible Team Members chose not to participate in our Company-sponsored health care plans for various reasons, but we expect to continue to see increased costs due to the impact of changes in the health care laws.

In the past, many of our eligible team members chose not to participate in our Company-sponsored health care plans for various reasons, but we may still experience higher health care costs due to increased utilization, medical cost trends, and regulatory or plan design changes.

Our distributors and suppliers also may be affected by higher minimum wage or health care costs, which could result in higher costs for goods and services supplied to us.

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Our failure to remain in compliance with governmental laws and regulations as they continually evolve, and the associated costs of compliance, could cause our business results to suffer.

Our business is subject to various government laws and regulations, including, among others, those relating to our employees, public health and safety, food safety, alcoholic beverage control, public accommodations, data privacy and security, securities regulation, and consumer health regulations, including those pertaining to nutritional content and menu labeling such as the Affordable Care Act, which requires restaurant companies such as ours to disclose calorie information on their menus.

These laws and regulations continually evolve and change, and compliance may be costly and time-consuming.

Moreover, we may fail to maintain compliance with all laws and regulations despite our best efforts.

Changes in applicable laws and regulatory requirements, or failure to comply with them could result in, among other things, increased exposure to litigation, administrative enforcement actions or governmental investigations or proceedings;

revocation of required licenses or approvals;

and civil and criminal liability.

These negative consequences could increase the cost of or interfere with our ability to operate our business and execute our strategies.

Various employment laws govern our relationship with our Team Members and affect operating costs.

Our business is subject to extensive and frequently changing government laws and regulations, including, among others, those relating to our employees, public health and safety, food safety, alcoholic beverage control, public accommodations, data privacy and security, securities regulation, and consumer health regulations, including those pertaining to nutritional content and menu labeling.

Compliance with these laws and regulations can be complex, costly, and time-consuming, and we may not be able to maintain compliance in all circumstances despite our efforts.

Changes in applicable laws or regulatory requirements, or failure to comply with them, could result in increased litigation, governmental investigations or enforcement actions, revocation of required licenses or permits, fines, penalties, or civil or criminal liability, any of which could increase our costs or interfere with our ability to operate our business and execute our strategies.

Various employment and labor laws govern our relationship with team members and effect operating costs.

These laws govern employee classification, wage rates, fair scheduling and payment requirements including tip credit laws and overtime pay, meal and rest breaks, unemployment and other taxes, health care and benefits, workers' compensation rates, labor relations, work authorization regulations, and discriminatory conduct.

Changes in these laws or our failure to comply with enforcement requirements could require changes to our operations that could harm our operating results.

For example, although we require all Team Members to provide us with the government-specified documentation evidencing their employment eligibility, some Team Members, without our knowledge, may not meet federal citizenship or residency requirements, which could lead to a disruption in our work force.

In addition, we rely on our Team Members to accurately disclose the full amount of tips received, and we base our FICA tax reporting on the amounts provided to us by such tipped Team Members.

Inaccurate FICA tax reporting could subject us to monetary liabilities.

A number of other factors could adversely affect our operating results, including:

• additional government-imposed increases in minimum and/or tipped wages, overtime pay, paid leaves of absence, sick leave, and mandated health benefits;

• increased tax reporting and tax payment requirements for employees who receive gratuities;

• a reduction in the number of states that allow gratuities to be credited toward minimum wage requirements;

• increased employee litigation including claims under federal and/or state wage and hour laws, including the Worker Adjustment and Retraining Notification (WARN) Act of 1988.

In recent years, there has been public focus by investors, environmental activists, the media and governmental and nongovernmental organizations on social and environmental sustainability matters, including packaging and waste, animal health and welfare, human rights, climate change, greenhouse gases and land, energy and water use.

As a result, we have experienced increased expectations and costs to provide expanded disclosure and make commitments, establish goals or set targets with respect to various environmental and social issues and to take the actions necessary to meet those commitments, goals and targets.

If we are not effective in addressing social and environmental sustainability matters, consumer trust in our brand may suffer.

In addition, the actions needed to achieve our commitments, goals and targets could result in market, operational, execution and other costs, which could have a material adverse effect on our results of operation and financial condition.

Our results of operation and financial condition could be adversely impacted if we are unable to effectively manage the risks or costs to us and our supply chain associated with social and environmental sustainability matters.

Changes in these laws, increased enforcement, or failure to comply could require operational changes that harm our operating results, increase labor costs, disrupt our workforce, or result in litigation or penalties.

For example, we rely on team members to provide accurate work authorization documentation and to report gratuities received, which we use for payroll and FICA tax reporting purposes.

Inaccurate reporting or noncompliance could subject us to monetary or other liabilities.

In addition, our operating results could be adversely affected by increases in minimum or tipped wages, overtime requirements, paid leave mandates, health benefit obligations, tax reporting requirements related to gratuities, reductions in the availability of tip credits, or increased employee litigation, including claims under federal or state wage and hour laws.

In recent years, there has been an evolving public focus on corporate responsibility, including environmental, social, and governance matters.

As a result, we have experienced increased expectations and costs to provide expanded disclosure and make commitments, establish goals or set targets with respect to various corporate responsibility issues, such as the reduction of greenhouse gases, and to take the actions necessary to meet those commitments, goals and targets, and these expectations and costs have and may continue to vary across jurisdictions in which we operate.

If we are not effective in addressing these matters, consumer trust in our brand may suffer.

As public and political sentiment regarding corporate responsibility has evolved, we may now also face the additional risk of reputational harm, litigation, or other challenges from stakeholders opposed to corporate responsibility initiatives.

Our results of operation and financial condition could be adversely impacted if we are unable to effectively manage the risks and costs associated with corporate responsibility matters.

We are subject to "dram shop" statutes in some states.

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Consequently, our business could be negatively affected and less profitable if we are unable to successfully defend and protect our intellectual property.

The Company's effective tax rate could be volatile and materially change as a result of changes in tax laws.

During 2022, tax legislation was enacted that includes the 15% corporate minimum income tax for certain large corporate taxpayers.

At this time, the Company is not subject to the corporate minimum tax and does not project that it will be subject to the tax in the near future.

Changes in tax laws and unanticipated tax liabilities could adversely affect our financial results.

We are primarily subject to income and other taxes in the United States.

Our effective income tax rate and other taxes could be adversely affected by a number of factors, including changes in the valuation of deferred tax assets and liabilities, changes in tax laws, regulations, interpretations, or enforcement practices, and the outcome of income tax or other tax audits.

Future change to tax laws could have a negative impact to the Company's effective tax rate and cash tax refunds.

Additionally, while we believe our tax estimates are reasonable, the final determination of tax audits could be materially different from our historical income tax provisions and accruals.

Additionally, while we believe our tax estimates are reasonable, the final determination of tax audits and tax litigation could be materially different from our historical income tax provisions and accruals.

The results of a tax audit could have a material effect on our results of operations or cash flows in the period which the final determination is made.

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In addition, we are subject to the same risks of negative publicity resulting from these sorts of allegations even if the claim actually involves one of our franchisees.

Any failure by us (or claims of failure) to comply with the various federal and state labor laws governing our relationship with our Team Members including requirements pertaining to minimum wage, overtime pay, meal and rest breaks, unemployment tax rates, workers' compensation rates, work authorization, and discriminatory conduct, may have a material adverse effect on our business or operations.

Any failure by us (or claims of failure) to comply with the various federal and state labor laws governing our relationship with our team members including requirements pertaining to minimum wage, overtime pay, meal and rest breaks, unemployment tax rates, workers' compensation rates, work authorization, and discriminatory conduct, may have a material

adverse effect on our business or operations.

We have been subject to such claims from time to time.

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Risks Related to Owning Our Stock

The market price of our common stock is subject to volatility, which has and may continue to attract the interest of activist stockholders or subject us to securities litigation, which could cause us to incur significant expenses, hinder execution of our strategy, and impact our stock price.

During fiscal 2024, the price of our common stock fluctuated between $3.04 and $11.83 per share.

The market price of our common stock may be significantly affected by a number of factors, including, but not limited to, actual or anticipated variations in our operating results or those of our competitors as compared to analyst expectations, changes in financial estimates by research analysts with respect to us or others in the restaurant industry, and announcements of significant transactions (including mergers or acquisitions, divestitures, joint ventures or other strategic initiatives) by us or others in the restaurant industry.

In addition, the equity markets have experienced price and volume fluctuations that affect the stock price of companies in ways that have been unrelated to an individual company's operating performance.

The price of our common stock may continue to be volatile, based on factors specific to our Company and industry, as well as factors related to the equity markets overall.

Moreover, such volatility has in the past and may in the future attract the interest of activist stockholders, and in the past, following periods of volatility in the market price of a company’s stock, securities class action litigation has been brought against companies.

Responding to activist stockholders and securities litigation can be costly and time-consuming, and the perceived uncertainties as to our future direction resulting from responding to activist strategies could itself then further affect the market price and volatility of our common stock.

The market price of our common stock is subject to volatility, which has and may continue to attract the interest of activist stockholders or subject us to securities litigation, which could cause us to incur significant expenses, divert management attention, hinder execution of our strategy, and impact our stock price.

The market price of our common stock has experienced volatility and historic lows, and may continue to fluctuate significantly due to a number of factors, including actual or anticipated variations in our operating results or those of our competitors as compared to analyst expectations, changes in financial estimates or recommendations by research analysts, and announcements of significant transactions or strategic initiatives by us or other companies in the restaurant industry.

In addition, the equity markets have experienced price and volume fluctuations that affect the stock price of companies in ways unrelated to the operating performance of individual companies.

Such volatility has recently, and may in the future, attract the interest of activist stockholders seeking to influence our strategic direction, governance practices, operations, or capital allocation decisions.

In addition, volatility in stock prices could in the future result in securities class action litigation.

Responding to activist stockholder activity or securities litigation is costly and time-consuming and diverts management and Board attention from executing our strategy.

The uncertainty associated with such matters could further contribute to volatility in the market price of our common stock and adversely affect stockholder value.

We may not repurchase our common stock pursuant to our share repurchase program, and any repurchases may not enhance long-term stockholder value.

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Our ability to repurchase stock will depend on our ability to generate sufficient cash flows from operations, as supplemented our capacity to borrow funds, which may be subject to economic, financial, competitive and other factors that are beyond our control.

Further, our credit facility limits our ability to repurchase shares to certain conditions set forth by the lenders.

Further, our credit facility limits our ability to repurchase shares according to certain conditions set forth by the lenders.

Making share repurchases, or alternatively limiting or halting share repurchases under our share repurchase program may negatively impact investor perception of us and may therefore affect the market price and volatility of our stock.

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What changed 10-K

Item 1A. Risk Factors