What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-02-23 compared with 2023-02-24 · 155 added, 169 removed, 224 unchanged (59% of the section changed)

Careful consideration should be given to the risks described below.

If any of the risks and uncertainties described in the cautionary factors described below actually occurs, our business, financial condition and results of operations, and the trading price of our common stock could be materially and adversely affected.

If any of the risks and uncertainties described in the cautionary factors described below actually occur, our business, financial condition, results of operations, liquidity and the trading price of our common stock could be materially and adversely affected.

Moreover, we operate in a very competitive and rapidly changing environment.

New factors emerge from time to time and it is not possible to predict the impact of all these factors on our business, financial condition or results of operations.

New factors emerge from time to time and it is not possible to predict the impact of all these factors on our business, financial condition, results of operations or liquidity.

Risks Related to our Growth and Operating Strategy

Our quarterly operating results may fluctuate significantly and could fall below the expectations of securities analysts and investors due to a number of factors, many of which are beyond our control, resulting in a decline in our stock price.

Our quarterly operating results may fluctuate significantly because of several factors, including:

● the timing of new restaurant openings and related expenses;

● restaurant operating costs for our newly-opened restaurants, which are often significantly higher during the first several months of operation than thereafter;

● labor availability and costs for hourly and management personnel including increases relating to unionization and mandated changes in federal and/or state minimum and tipped wage rates, overtime regulations, state unemployment taxes, sick pay or health benefits and other regulatory changes relating to any of the foregoing;

● fluctuations in commodity prices and utility and energy costs;

● profitability of our restaurants, particularly in new markets;

● the impact of litigation, including negative publicity;

● decreases in average unit volume and comparable restaurant sales, including to-go sales;

● impairment of long-lived assets, including goodwill, and any loss on restaurant relocations or closures;

● general economic conditions, including an economic recession, which can affect restaurant traffic, local labor costs, and prices we pay for the food products and other supplies we use;

● negative publicity regarding food safety and other food and beverage related matters, including the integrity of our, and/or our suppliers’ food processing;

● negative publicity relating to the consumption of beef or other products we serve;

● negative publicity regarding health concerns and/or global pandemics;

● closures and/or dining rooms operating at limited capacity due to government mandated restaurant closures and/or limited availability of staff to meet our business standards;

● changes in consumer preferences and competitive conditions including changes related to environmental, social and/or governance ("ESG") pressures;

● expansion to new domestic and/or international markets;

● the impact of inclement weather, natural disasters and other calamities which impact guest traffic or product availability at our restaurants;

● increases in infrastructure costs;

● changes in interest rates;

● adoption of new, or changes in existing, accounting policies or practices;

● changes in and/or interpretations of federal and state tax laws;

● actual self-insurance claims varying from actuarial estimates;

● competitive actions.

Our business is also subject to seasonal fluctuations.

Historically, sales in most of our restaurants have been higher during the winter months of each year.

Holidays, changes in weather, severe weather and similar conditions may impact sales volumes seasonally in some operating regions.

As a result, our quarterly operating results and comparable restaurant sales may fluctuate as a result of seasonality.

Accordingly, results for any one quarter are not necessarily indicative of results to be expected for any other quarter or for any year and comparable, restaurant sales for any particular future period may decrease.

In the future, operating results may fall below the expectations of securities analysts and investors.

In that event, the price of our common stock could decrease.

Our growth strategy, which primarily depends on our ability to open new restaurants that are profitable, is subject to many factors, some of which are beyond our control.

1 unchanged sentence

We have experienced delays in opening some of our restaurants in the past and may experience delays in the future.

These delays impact the timing of new restaurant openings and the related pre-opening expenses.

Delays or failures in opening new restaurants could adversely affect our growth strategy.

One of our biggest challenges in executing our growth strategy may be locating and securing an adequate supply of suitable new

restaurant sites that satisfy our financial targets.

One of our biggest challenges in executing our growth strategy may be locating and securing an adequate supply of suitable new restaurant sites that satisfy our financial targets.

Competition for suitable restaurant sites in our target markets may be intense.

5 unchanged sentences

Sales at restaurants opened in new markets may take longer to reach average unit volume, if at all, thereby affecting our overall profitability.

Additionally, the opening of a new restaurant could negatively impact sales at one or more of our existing nearby restaurants, which could adversely affect our financial performance.

Our localized marketing strategy may not result in brand awareness and guest engagement.

Additionally, the opening of a new restaurant could negatively impact sales at one or more of our existing nearby restaurants, which could adversely affect our results of operations.

Our ability to open new restaurants that are profitable will also depend on numerous other factors, many of which are beyond our control, including, but not limited to, the following:

1 unchanged sentence

● our ability to negotiate suitable purchase or lease terms to execute our business strategy;

● the availability of construction materials, equipment and labor;

● the availability and cost of construction materials, equipment and labor;

● our ability to control construction and development costs of new restaurants (including increased site, supply chain and distribution costs);

3 unchanged sentences

● redevelopment of other parts of a development adjacent to our premises that affect the parking available for our restaurant;

● our ability to secure liquor licenses, or at all;

● general economic conditions, including an economic recession;

● our ability to secure liquor licenses;

● competitive and economic conditions, consumer tastes and discretionary spending patterns that are different from and more difficult to predict or satisfy than in our existing markets;

● changes in federal, state and/or local tax laws;

5 unchanged sentences

● our ability to execute our business strategy effectively;

● our ability to maintain and manage the increased levels of to-go sales at our restaurants;

● our ability to maintain higher levels of to-go sales at our restaurants;

● competition, from our competitors in the restaurant industry, our own restaurants, and/or other food service providers (such as delivery services and grocery stores);

● the impact of permanent changes in weather patterns that can cause inclement weather, natural disasters and other calamities;

● the impact of permanent changes in weather patterns that can cause inclement weather, natural disasters and other calamities which impact guest traffic or product availability at our restaurants;

● consumer trends and seasonality;

2 unchanged sentences

● loss of parking and/or access rights due to government action (such as eminent domain actions) or through private transactions;

● government mandated dining room closures and/or dining rooms operating at limited capacity due to health epidemics or pandemics;

● closures and/or dining rooms operating at limited capacity due to government mandated restaurant closures and/or limited availability of staff to meet our business standards;

● negative publicity regarding food safety, health concerns, quality of service, and other food or beverage related matters, including the integrity of our or our suppliers’ food processing;

3 unchanged sentences

Our average unit volume and comparable restaurant sales may not increase at rates achieved in the past, which may affect our sales growth and will continue to be a critical factor affecting our profitability.

In addition, changes in our average unit volume and comparable restaurant sales could cause the price of our common stock to significantly fluctuate.

Our business is also subject to seasonal fluctuations.

Historically, sales in most of our restaurants have been higher during the winter months of each year.

Holidays, changes in weather, severe weather and similar conditions may impact sales volumes seasonally in some operating regions.

Accordingly, results for one quarter are not necessarily indicative of results to be expected for any other quarter or for any year and comparable restaurant sales for any particular future period may decrease.

In the future, operating results may fall below the expectations of securities analysts and investors.

In that event, the price of our common stock could decrease.

The development and/or acquisition of new restaurant concepts may not contribute to our growth.

35 unchanged sentences

We plan to continue to opportunistically acquire existing restaurants from our domestic franchisees over time.

Additionally, from time to time, we evaluate potential mergers, acquisitions, joint ventures or other strategic initiatives

(including retail initiatives utilizing our intellectual property or other brand extensions) to acquire or develop additional business channels or concepts, and/or change the business strategy regarding an existing concept.

Additionally, from time to time, we evaluate potential mergers, acquisitions, joint ventures or other strategic initiatives (including retail initiatives utilizing our intellectual property or other brand extensions) to acquire or develop additional business channels or concepts, and/or change the business strategy regarding an existing concept.

To successfully execute any acquisition or development strategy, we will need to identify suitable acquisition or development candidates, negotiate acceptable acquisition or development terms and possibly obtain appropriate financing.

10 unchanged sentences

In addition, we may experience dilution of the goodwill associated with our concepts as they become more common and increasingly accessible.

Approximately 21% of our company restaurants are located in Texas and Florida and, as a result, we are sensitive to economic and other trends and developments in those states.

As of December 26, 2023, we operated a total of 87 company restaurants in Texas and 44 company restaurants in Florida.

As a result, we are particularly susceptible to adverse trends and economic conditions in those states, including any state mandated changes in minimum and tipped wage rates and economic pressures that may result in lower sales and profits at our restaurants.

In addition, given our geographic concentration in these states, negative publicity regarding any of our restaurants in either Texas or Florida could have a material adverse effect on our business and operations, as could other occurrences in either Texas or Florida such as health epidemics or pandemics, local strikes, energy shortages or extreme fluctuations in energy prices, droughts, earthquakes, hurricanes, fires or other natural disasters.

Our franchisees could take actions that could harm our business.

Both our domestic and international franchisees are contractually obligated to operate their restaurants in accordance with our applicable restaurant operating standards.

We also provide training and support to franchisees.

However, most franchisees are independent third parties that we do not control, and these franchisees own, operate and oversee the daily operations of their restaurants.

As a result, the ultimate success and quality of any franchise restaurant rests with the franchisee.

If franchisees do not successfully operate restaurants in a manner consistent with our standards, our image and reputation could be harmed, which in turn could adversely affect our business and operating results.

Decreased cash flow from operations, or an inability to access credit, could negatively affect our business initiatives or may result in our inability to execute our revenue, expense, and capital allocation strategies.

Our ability to fund our operating plans and to implement our capital allocation strategies depends on sufficient cash flow from operations and/or other financing, including the use of funding under our credit facility.

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

There can be no assurance, however, that these sources of financing will be available on terms favorable to us, or at all.

Our capital allocation strategies include, but are not limited to, new restaurant development, payment of dividends, refurbishment or relocation of existing restaurants, repurchases of our common stock and franchise acquisitions.

If we experience decreased cash flow from operations, 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 or a negative effect on our revenue could affect our ability to borrow or comply with our covenants under our credit facility.

If we are unable to raise additional capital, our growth could be impeded.

Our existing credit facility limits our ability to incur additional debt.

The lenders’ obligation to extend credit under our credit facility depends on our maintaining certain financial covenants.

If we are unable to maintain these covenants, we would be unable to obtain additional financing under this credit facility.

The credit facility permits us to incur additional secured or unsecured indebtedness outside the credit facility, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth or circumstances where the incurrence of secured or unsecured indebtedness would prevent us from complying with our financial covenants.

If we are unable to borrow additional capital or have sufficient liquidity to either repay or refinance the then outstanding balance at the expiration of our credit facility, or upon violation of the covenants, our growth could be impeded and our financial performance could be significantly adversely affected.

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

1 unchanged sentence

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

In connection with the relocation, other operational changes, or closure of any restaurant, we may nonetheless be committed to perform on our obligations under the applicable lease including, among other things, paying the base rent and real estate taxes for the balance of the lease term.

In connection with the relocation, other operational changes or closure of any restaurant, we may nonetheless be committed to perform on our obligations under the applicable lease

including, among other things, paying the base rent and real estate taxes for the balance of the lease term.

We also are subject to landlord actions that could negatively impact our business or operations.

1 unchanged sentence

As a result, 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.

As a result, we may be required to relocate or close a restaurant, which could subject us to construction and other costs and risks, and may have an adverse effect on our operating performance.

Approximately 21% of our company restaurants are located in Texas and Florida and, as a result, we are sensitive to economic and other trends and developments in those states.

As of December 27, 2022, we operated a total of 81 company restaurants in Texas and 44 company restaurants in Florida.

operations, as could other occurrences in either Texas or Florida such as health epidemics or pandemics, local strikes, energy shortages or extreme fluctuations in energy prices, droughts, earthquakes, hurricanes, fires or other natural disasters.

As a result, we may be required to relocate or close a restaurant, which could subject us to construction and other costs and risks and may have an adverse effect on our results of operations.

We may be required to record additional impairment charges in the future.

In accordance with accounting guidance as it relates to the impairment of long-lived assets, we make certain estimates and projections with regard to company restaurant operations, as well as our overall performance in connection with our impairment analysis for long- lived assets.

When impairment triggers are deemed to exist for any company restaurant, the estimated undiscounted future cash flows for the restaurant are compared to its carrying value.

If the carrying value exceeds the undiscounted cash flows, an impairment charge would be recorded equal to the difference between the carrying value and the estimated fair value.

We review the value of our goodwill on an annual basis and also when events or changes in circumstances indicate that the carrying value of goodwill may exceed its fair value.

The estimates of fair value are based upon the best information available as of the date of the assessment and incorporate management assumptions about expected future cash flows and contemplate other valuation measurements and techniques.

The estimates of fair value used in these analyses require the use of judgment, certain assumptions and estimates of future operating results.

If actual results differ from our estimates or assumptions, additional impairment charges may be required in the future.

If impairment charges are significant, our results of operations could be adversely affected.

Risks Related to Consumer Discretionary Spending and Macroeconomic Conditions

Changes in consumer preferences and discretionary spending could adversely affect our business.

1 unchanged sentence

Continued social concerns or shifts in consumer preferences away from our restaurants or food offerings, particularly beef, could harm our business.

Also, our success depends to a significant extent on discretionary consumer spending, which is influenced by general economic conditions and the availability of discretionary income.

Consumer preferences regarding food sourcing in response to environmental or welfare concerns could also harm our business.

Additionally, our success depends to a significant extent on discretionary consumer spending, which is influenced by general economic conditions, including high inflationary periods, and the availability of discretionary income.

Accordingly, we may experience declines in sales during economic downturns, pandemics or other periods of uncertainty.

Any material decline in the amount of discretionary spending could have a material adverse effect on our business, results of operations, financial condition or liquidity.

Our objective to increase sales and profits at existing restaurants could be adversely affected by macroeconomic conditions.

In future periods, the U.S.

and global economies could further suffer from a downturn in economic activity.

Recessionary economic cycles, higher interest rates, higher fuel and other energy costs, sustained labor inflation, increases in commodity prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws, financial market volatility, social unrest, government spending, a low or stagnant pace of economic recovery and growth, or other economic factors that may affect consumer spending or buying habits could adversely affect the demand for our products.

In addition, there is no assurance that any governmental plans to stimulate the economy will foster growth in consumer spending or buying habits.

As in the past, we could experience reduced guest traffic or we may be unable or unwilling to increase the prices we charge for our products to offset higher costs or fewer transactions, either of which could reduce our sales and profit margins.

Also, landlords or other tenants in the shopping centers in which some of our restaurants are located may experience difficulty as a result of macroeconomic trends or cease to operate, which could in turn negatively affect guest traffic at our restaurants.

All of these factors could have a material adverse impact on our business, results of operations, financial condition or liquidity.

Risks Related to Government Regulation and Litigation

We may not be able to obtain and maintain licenses and permits necessary to operate our restaurants and compliance with governmental laws and regulations could adversely affect our operating results.

14 unchanged sentences

Although our restaurants and other places of accommodation are designed to be accessible to the disabled, we could be required to make unexpected modifications to provide service to, or make reasonable accommodations, for disabled persons.

Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand.

We own certain common law trademark rights and a number of federal and international trademark and service mark registrations, including our trade names and logos, and proprietary rights relating to certain of our core menu offerings.

We believe that our trademarks and other proprietary rights are important to our success and our competitive position.

Therefore, we devote appropriate resources to the protection of our trademarks and proprietary rights.

However, the protective actions that we take may not be enough to prevent unauthorized usage or imitation by others, which could harm our image, brand or competitive position and, if we commence litigation to enforce our rights, cause us to incur significant legal fees.

Our inability to register or protect our marks and other proprietary rights in foreign jurisdictions could adversely affect our competitive position in international markets.

We cannot assure you that third parties will not claim that our trademarks or menu offerings infringe upon their proprietary rights.

Any such claim, whether or not it has merit, could be time- consuming, result in costly litigation, cause delays in introducing new menu items in the future or require us to enter into royalty or licensing agreements.

As a result, any such claim could have a material adverse effect on our business, results of operations, financial condition or liquidity.

Issues relating to ESG topics could adversely affect our operating results.

Entities across all industries are facing increased interest related to their ESG compliance and practices.

Evolving consumer and investor interest and preferences as well as governmental regulation may result in additional transparency, due diligence, reporting and specific target-setting with regard to our business and supply chain that could result in additional costs to comply with such demands.

Failure to comply with the increased demands could result in public or investor scrutiny and/or litigation and could have an adverse effect on our business.

Establishing targets or making other public commitments due to these demands, without a full or complete understanding of the cost or operational impact of changes in our supply chain or operating model, could also adversely affect our business and financial condition.

We are subject to increasing legal complexity and could be party to litigation that could adversely affect us.

1 unchanged sentence

We could be subject to legal proceedings that may adversely affect our business, including class actions, administrative proceedings, government investigations, employment and personal injury claims, claims alleging violations of federal and state laws regarding consumer, workplace and employment matters, wage and hour claims, discrimination and similar matters, landlord/tenant disputes, disputes with current and former suppliers, claims by current and former franchisees, data privacy claims and intellectual property claims (including claims that we infringed upon another party’s trademarks, copyrights or patents).

Additionally, we are subject to Securities and Exchange Commission ("SEC") and NASDAQ reporting and disclosure requirements.

Inconsistent standards imposed by governmental authorities can adversely affect our business and increase our exposure to litigation which could result in significant judgments, including punitive and liquidated damages, and injunctive relief.

1 unchanged sentence

As a Company, we take responsible alcohol service seriously.

However, we are subject to "dram shop"

However, we are subject to "dram shop" statutes.

These statutes generally allow a person injured by an intoxicated person to recover damages from an establishment that served alcoholic beverages to the intoxicated person.

15 unchanged sentences

In addition, we self- insure a significant portion of expected losses under our health, workers’ compensation, general liability, employment practices liability, cybersecurity and property insurance programs.

Unanticipated changes in the actuarial assumptions and management estimates underlying our reserves for these losses could result in significantly different amounts of expense under these programs, which could have a material adverse effect on our financial condition, results of operations and liquidity.

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

There can be no assurance, however, that these sources of financing will be available on terms favorable to us, or at all.

If we experience decreased cash flow from operations, 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 or a negative effect on our revenue could affect our ability to borrow or comply with our covenants under our amended revolving credit facility.

If we are unable to raise additional capital, our growth could be impeded.

Our existing credit facility limits our ability to incur additional debt.

The lenders’ obligation to extend credit under our amended revolving credit facility depends on our maintaining certain financial covenants.

If we are unable to maintain these covenants, we would be unable to obtain additional financing under this amended revolving credit facility.

The amended revolving credit facility permits us to incur additional secured or unsecured indebtedness outside the revolving credit facility, except for the incurrence of secured indebtedness that in the aggregate is equal to or greater than $125.0 million and 20% of our consolidated tangible net worth or circumstances where the incurrence of secured or unsecured indebtedness would prevent us from complying with our financial covenants.

If we are unable to borrow additional capital or have sufficient liquidity to either repay or refinance the then outstanding balance at the expiration of our amended revolving credit facility, or upon violation of the covenants, our growth could be impeded and our financial performance could be significantly adversely affected.

Unanticipated changes in our claims experience and/or the actuarial assumptions and management estimates underlying our reserves for these losses could result in significantly different amounts of expense under these programs, which could have a material adverse effect on our financial condition, results of operations and liquidity.

Additionally, if our insurance costs increase, there can be no assurance we will be able to successfully offset the effect of such increases and our results of operations may be adversely affected.

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.

We are primarily subject to federal, state and local income and other taxes in the United States.

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

Any significant increases in income tax rates, changes in income tax laws or unfavorable resolution of tax matters could have a material adverse impact on our financial results.

We may be required to record additional impairment charges in the future.

When impairment triggers are deemed to exist for any company restaurant, the estimated undiscounted future cash flows for the restaurant are compared to its carrying value.

If the carrying value exceeds the undiscounted cash flows, an impairment charge would be recorded equal to the difference between the carrying value and the estimated fair value.

We review the value of our goodwill on an annual basis and also when events or changes in circumstances indicate that the carrying value of goodwill or other intangible assets may exceed the fair value of such assets.

The estimates of fair value used in these analyses require the use of judgment, certain assumptions and estimates of future operating results.

If actual results differ from our estimates or assumptions, additional impairment charges may be required in the future.

If impairment charges are significant, our results of operations could be adversely affected.

Any significant increases in income tax rates, changes in and/or interpretations of income tax laws or unfavorable resolution of tax matters could have a material adverse impact on our results of operations, financial condition or liquidity.

Failure to adequately address environmental, social and/or governance ( " ESG " ) matters could adversely affect our brand, business, results of operations and financial condition.

Entities across all industries are facing increased interest related to ESG matters including packaging and waste, animal health and welfare, human rights, climate change, greenhouse gases and land, energy and water use.

In addition, we have faced enhanced pressure to provide expanded disclosures around ESG matters and establish goals or targets with respect to ESG matters.

In response to the heightened level of expectation for expanded ESG disclosure, we have published a Corporate Sustainability Report detailing our ESG efforts and which we update regularly.

Evolving consumer and investor interest and preferences as well as governmental regulation may result in additional disclosure, due diligence, reporting and specific target-setting with regard to our business and supply chain that could result in additional costs to comply with such demands.

Failure to comply with the increased demands could result in consumer or investor scrutiny and/or litigation and could have an adverse effect on our business.

Risks Related to Human Capital

Failure to retain the services of our key management personnel, or to successfully execute succession planning and attract additional qualified personnel could harm our business.

2 unchanged sentences

Competition for these employees is intense.

The loss of the services of members of our senior management team or other key officers or managers or the inability to attract additional qualified personnel as needed could significantly harm our business.

The unplanned loss of the services of members of our senior management team or other key officers or managers or the inability to attract additional qualified personnel as needed could significantly harm our business.

In addition, our business could suffer from any actual or alleged misconduct of any of our key personnel.

Our franchisees could take actions that could harm our business.

Both our domestic and international franchisees are contractually obligated to operate their restaurants in accordance with our applicable restaurant operating standards.

We also provide training and support to franchisees.

However, most franchisees are independent third parties that we do not control, and these franchisees own, operate and oversee the daily operations of their restaurants.

As a result, the ultimate success and quality of any franchise restaurant rests with the franchisee.

Risks Related to Information Technology and Privacy

Our business could be adversely affected by increased labor costs or labor shortages.

Labor is a primary component in the cost of operating our business.

We devote significant resources to recruiting and training our restaurant managers and hourly employees.

Increased labor costs due to competition, unionization, increased minimum and tipped wages, changes in hourly and overtime pay, state unemployment rates, sick pay or other employee benefits costs (including workers’ compensation and health insurance), company staffing initiatives or otherwise any regulatory changes resulting from any of the foregoing would adversely impact our operating expenses.

In addition, failure to adequately monitor and proactively respond to employee dissatisfaction could lead to poor guest satisfaction, higher turnover, litigation and unionization efforts, which could negatively impact our results of operations.

Increased competition for qualified employees caused by a shortage in the labor pool exerts upward pressure on wages paid to attract and retain such personnel, resulting in higher labor costs, together with greater recruitment and training expense.

We could suffer from significant indirect costs, including restaurant disruptions due to management or hourly labor turnover and potential delays in new restaurant openings.

A shortage in the labor pool could also cause our restaurants to be required to operate with reduced staff which could negatively impact our ability to provide adequate service levels to our guests resulting in adverse guest reactions and a possible reduction in guest traffic counts.

Additionally, personal or public health concerns might make some existing personnel or potential candidates reluctant to work in enclosed restaurant environments.

We have many restaurants located in states or municipalities where the minimum and/or tipped wage is greater than the federal minimum and/or tipped wage.

We anticipate that additional legislation increasing minimum and/or tipped wage standards will be enacted in future periods either federally or in state and local jurisdictions.

In addition, regulatory actions which result in changes to healthcare eligibility, design and cost structure could occur.

Any increases in minimum and/or tipped wages or increases in employee benefits costs will result in sustained higher labor costs.

Our operating margin will be adversely affected to the extent that we are unable or are unwilling to offset any increase in these labor costs through higher prices on our products.

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

Our success depends on our ability to attract, motivate and retain qualified employees to keep pace with our growth strategy.

If we are unable to do so, our results of operations may also be adversely affected.

Risks Related to Technology, Privacy and Intellectual Property

We rely heavily on information technology, and any material failure, weakness, ransomware or interruption could prevent us from effectively operating our business.

4 unchanged sentences

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

Additionally, as we become increasingly reliant on digital ordering and payment as a sales channel, our business could be negatively impacted if we are unable to successfully implement, execute or maintain our consumer-facing digital initiatives.

Additionally, as we become

increasingly reliant on digital ordering and payment as a sales channel, our business could be negatively impacted if we are unable to successfully implement, execute or maintain our consumer-facing digital initiatives.

The failure of these systems to operate effectively, maintenance problems, upgrading or transitioning to new platforms or a material breach in the security of these systems could result in delays or errors to guest service and reduce efficiency in our operations.

In addition, as we implement new technology platforms to improve the overall guest experience, there can be no guarantees that these platforms will operate as reliably or be as operationally impactful as intended.

In addition, as we implement new technology platforms to improve productivity and overall guest experience, there can be no guarantees that these platforms will operate as reliably or be as operationally impactful as intended.

We have disaster recovery procedures and business continuity plans in place to address events of a crisis nature, including tornadoes and other natural disasters, and back up off-site locations for recovery of electronic and other forms of data information.

However, if we are unable to fully implement our disaster recovery plans, we may experience delays in recovery of data, inability to perform vital corporate functions, tardiness in required reporting and compliance, failures to adequately support field operations and other breakdowns in normal communication and operating procedures that could have a material adverse effect on our financial condition, results of operations and exposure to administrative and other legal claims.

Our ability to expand and update our information technology infrastructure in response to our growing and changing needs would be inhibited in the event of a cybersecurity incident.

This could lead to a delayed implementation of new service offerings, disruptions to guest experiences including via our website and applications and the diversion of resources that would otherwise be invested in expanding our business and operations.

Additionally, we could be subject to litigation and government enforcement actions as a result of any such failure.

Any such claim or proceeding could cause us to incur significant unplanned expenses in excess of our insurance coverage, which could have a material impact on our financial condition and results of operations.

In addition, if there are malfunctions or other problems with our processing vendors, billing software or payment processing systems, it may cause interruption of normal business performance.

These vendors may also experience interruptions to their information technology systems that could adversely affect us and which we may have limited or no control.

We outsource certain business processes to third-party vendors that subject us to risks, including disruptions in business and increased costs.

6 unchanged sentences

New, modified and existing privacy and data protection laws and regulations may result in significant costs and compliance challenges and adversely affect our business and financial condition.

These privacy laws and regulations, which are constantly evolving, may be interpreted by regulatory authorities in new and differing manners and such interpretations may be inconsistent among jurisdictions.

We may incur increased costs to comply with increasingly demanding privacy laws and regulations.

These privacy laws and regulations, which are constantly evolving, may be interpreted by regulatory authorities in new and differing manners, including the issuing of rulings that invalidate prior laws or regulations or increase penalties, and such interpretations may be inconsistent among jurisdictions.

We may incur increased costs to comply with increasingly demanding privacy laws and regulations and such compliance may impede the development and offering of new products or services and may adversely impact the guest experience.

We could also be subject to government enforcement actions, private litigation and adverse publicity including reputational damage and loss of guest confidence.

2 unchanged sentences

In addition, certain of our vendors receive and/or maintain certain personal, financial and other information about our employees and guests on our behalf.

The use and handling, including security, of this information is regulated by privacy and data protection laws and regulations in various jurisdictions, as well as by certain third-party contracts, frameworks and industry standards, such as the Payment Card Industry Data Security Standard.

Hardware, software or other applications we develop and procure from third parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security.

The use and handling, including security, of this information is regulated by privacy and data protection laws and regulations in

various jurisdictions, as well as by certain third-party contracts, frameworks and industry standards, such as the Payment Card Industry Data Security Standard.

Hardware, software or other applications we develop and procure from third parties or vendor’s third-party applications could be subject to vulnerabilities or cybersecurity incidents or may contain defects in design or manufacture or other problems that could unexpectedly compromise information security.

Unauthorized parties may also attempt to gain access to our systems and facilities through fraud, trickery or other forms of deceiving our employees or vendors.

In addition, if our security and information systems are compromised as a result of data corruption or loss, cyber-attack or a network security incident, or if our employees or vendors (or other persons or entities with which we do business with) fail to comply with such laws and regulations or fail to meet industry standards and this information is obtained by unauthorized persons or used inappropriately, it could result in liabilities and penalties and could damage our reputation, cause interruption of normal business performance, cause us to incur substantial costs and result in a loss of guest confidence, which could adversely affect our results of operations and financial condition.

Additionally, we could be subject to litigation and government enforcement actions as a result of any such failure.

In addition, if there are malfunctions or other problems with our processing vendors, billing software or payment processing systems, it may cause interruption of normal business performance.

In addition, if our security and information systems are compromised as a result of data corruption or loss, cybersecurity incident or a network security incident, or if our employees or vendors (or other persons or entities with which we do business with) fail to comply with such laws and regulations or fail to meet industry standards and this information is obtained by unauthorized persons or used inappropriately, it could result in liabilities and penalties and could damage our reputation, cause interruption of normal business performance, cause us to incur substantial costs and result in a loss of guest confidence, which could adversely affect our results of operations and financial condition.

Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand.

We believe that our trademarks and other proprietary rights are important to our success and our competitive position.

Therefore, we devote appropriate resources to the protection of our trademarks and proprietary rights.

Our inability to register or protect our marks and other proprietary rights in foreign jurisdictions could adversely affect our competitive position in international markets.

We cannot assure you that third parties will not claim that our trademarks or menu offerings infringe upon their proprietary rights.

As a result, any such claim could have a material adverse effect on our business, results of operations, financial condition or liquidity.

Risks Related to the Restaurant Industry

4 unchanged sentences

We cannot predict whether we will be able to anticipate and react to changing food costs and/or loss of supply by adjusting our purchasing practices, menu prices or menu offerings, and a failure to do so could adversely affect our operating results.

Extreme and/or long term increases in commodity prices

could adversely affect our future results, especially if we are unable, primarily due to competitive reasons, to increase menu prices.

Extreme and/or long term increases in commodity prices could adversely affect our future results, especially if we are unable, primarily due to competitive reasons, to increase menu prices.

Additionally, if there is a time lag between the increasing commodity prices and our ability to increase menu prices or if we believe the commodity price increase to be short in duration and we choose not to pass on the cost increases, our short-term results could be negatively affected.

Also, if we adjust pricing there is no assurance that we will realize the full benefit of any adjustment due to changes in our guests’ menu item selections and guest traffic.

We currently purchase the majority of our beef from four beef suppliers with all of our beef coming from the United States or Canada.

While we maintain relationships with additional suppliers, if any of these vendors were unable to fulfill its obligations under its contracts, we could encounter supply shortages and incur higher costs to secure adequate supplies, either of which would harm our business.

Our business could be adversely affected by increased labor costs or labor shortages.

Labor is a primary component in the cost of operating our business.

We devote significant resources to recruiting and training our restaurant managers and hourly employees.

We could suffer from significant indirect costs, including restaurant disruptions due to management or hourly labor turnover and potential delays in new restaurant openings.

Additionally, personal or public health concerns might make some existing personnel or potential candidates reluctant to work in enclosed restaurant environments.

We have many restaurants located in states or municipalities where the minimum and/or tipped wage is greater than the federal minimum and/or tipped wage.

We anticipate that additional legislation significantly increasing minimum and/or tipped wage standards will be enacted in future periods and in other jurisdictions.

In addition, regulatory actions which result in changes to healthcare eligibility, design and cost structure could occur.

Any increases in minimum and/or tipped wages or increases in employee benefits costs will result in higher labor costs.

Our operating margin will be adversely affected to the extent that we are unable or are unwilling to offset any increase in these labor costs through higher prices on our products.

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

Our success depends on our ability to attract, motivate and retain qualified employees to keep pace with our growth strategy.

If we are unable to do so, our results of operations may also be adversely affected.

Our objective to increase sales and profits at existing restaurants could be adversely affected by macroeconomic conditions.

In future periods, the U.S.

and global economies could further suffer from a downturn in economic activity.

Recessionary economic cycles, higher interest rates, higher fuel and other energy costs, inflation, increases in commodity prices, higher levels of unemployment, higher consumer debt levels, higher tax rates and other changes in tax laws, financial market volatility, social unrest, government spending, a low or stagnant pace of economic recovery and growth, or other economic factors that may affect consumer spending or buying habits could adversely affect the demand for our products.

In addition, there is no assurance that any governmental plans to stimulate the economy will foster growth in consumer spending or buying habits.

All of these factors could have a material adverse impact on our business, results of operations, financial condition or liquidity.

We currently purchase our beef primarily from four beef suppliers coming from the United States or Canada.

While we maintain relationships with additional suppliers, if any of these vendors were unable to fulfill its obligations under its contracts, we could encounter supply shortages and/or incur higher costs to secure adequate supplies, either of which would harm our business.

Our success depends on our ability to compete with many food service businesses.

The restaurant industry is intensely competitive.

We compete with many well- established food service companies on the basis of taste, quality and price of products offered, guest service, atmosphere, location, take-out and delivery options and overall guest experience.

We compete with many well-established food service companies on the basis of taste, quality and price of products offered, guest service, atmosphere, location, take-out and delivery

options and overall guest experience.

Our competitors include a large and diverse group of restaurant chains and individual restaurants that range from independent local operators that have opened restaurants in various markets to well- capitalized national restaurant chains.

9 unchanged sentences

We could also incur significant liabilities if a lawsuit or claim results in a decision against us or litigation costs regardless of the result.

Our business could be adversely affected by our inability to respond to or effectively manage social media.

As part of our marketing strategy, we utilize social media platforms to promote our concepts and attract and retain guests.

Our strategy may not be successful, resulting in expenses incurred without improvement in guest traffic or brand relevance.

In addition, a variety of risks are associated with the use of social media, including improper disclosure of proprietary information, negative comments about us, exposure of personally identifiable information, fraud, or dissemination of false information.

The inappropriate use of social media vehicles by our guests or employees could increase our costs, lead to litigation or result in negative publicity that could damage our reputation and adversely affect our results of operations.

Given the marked increase in the use of social media platforms, individuals have access to a broad audience of consumers and other interested persons.

The availability of information on social media platforms is virtually immediate as is its impact.

Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on the accuracy of the content posted.

Information concerning our Company may be posted on such platforms at any time.

Additionally, social media has increasingly been utilized to target specific companies or brands as a result of a variety of actions or inactions, or perceived actions or inactions, that are disfavored by interest groups and such campaigns can rapidly accelerate and impact consumer behavior.

If we are unable to quickly and effectively respond to such reports, we may suffer declines in guest traffic.

The impact may be immediate without affording us an opportunity for redress or correction.

These factors could have a material adverse impact on our business.

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

4 unchanged sentences

The imposition of menu- labeling and food sourcing laws or regulations could have an adverse effect on our results of operations and financial position, as well as the restaurant industry in general.

The labeling and sourcing requirements and any negative publicity concerning any of the food products we serve may adversely affect demand for our food and could result in a decrease in guest traffic to

our restaurants.

If we react to labeling or sourcing requirements or negative publicity by changing our concepts or our menu offerings or their ingredients, we may lose guests who do not prefer the new concept or products, and we may not be able to attract sufficient new guests to produce the revenue needed to make our restaurants profitable.

4 unchanged sentences

However, food- borne illnesses and food safety issues occur in the food industry from time to time.

Any report or publicity, whether true or not, linking us to instances of food- borne illness or other food safety issues, including food tampering or contamination, could adversely affect our concepts and reputation as well as our revenue and profits.

In addition, instances of food- borne illness, food tampering or food contamination occurring solely at restaurants of our competitors could result in negative publicity about the food service industry generally and adversely impact our revenue and profits.

1 unchanged sentence

While we attempt to minimize the risk, we cannot assure that all food items are properly maintained during transport throughout the supply chain and that our employees will identify all products that may be spoiled and should not be used in our restaurants.

If our guests become ill from food- borne illnesses, we could be forced to temporarily close some restaurants.

If our guests become ill from food-borne illnesses, we could be forced to

temporarily close some restaurants.

Furthermore, any instances of food contamination, whether or not at our restaurants, could subject us or our suppliers to a food recall.

In addition to the novel coronavirus that causes COVID-19, the United States and other countries have experienced, or may experience in the future, outbreaks of viruses, such as Hepatitis A, Norovirus, Ebola, Avian Flu, SARS and H1N1.

In addition, the United States and other countries have experienced, or may experience in the future, outbreaks of viruses, such as COVID-19, Hepatitis A, Norovirus, Ebola, Avian Flu, SARS and H1N1.

To the extent that a virus is food- borne, future outbreaks may adversely affect the price and availability of certain food products and cause our guests to eat less of a product which may have a significant adverse effect on our business.

Risks Related to Our Corporate Structure

Our business could be adversely affected by our inability to respond to or effectively manage social media.

As part of our marketing strategy, we utilize social media platforms to promote our concepts and attract and retain guests.

Our strategy may not be successful, resulting in expenses incurred without improvement in guest traffic or brand relevance.

Given the marked increase in the use of social media platforms, individuals have access to a broad audience of consumers and other interested persons.

The availability of information on social media platforms is virtually immediate as is its impact.

Many social media platforms immediately publish the content their subscribers and participants post, often without filters or checks on the accuracy of the content posted.

Information concerning our Company may be posted on such platforms at any time.

This includes posts by social media influencers that have a significant number of followers and reach on the variety of social media platforms.

If we are unable to quickly and effectively respond to such reports, we may suffer declines in guest traffic.

The impact may be immediate without affording us an opportunity for redress or correction.

These factors could have a material adverse impact on our business.

Risks Related to Stock Ownership and Our Corporate Structure

Provisions in our charter documents and Delaware law may delay or prevent our acquisition by a third party.

Our certificate of incorporation and by- laws contain several provisions that may make it more difficult for a third party to acquire control of us without the approval of our Board of Directors (the "Board").

These provisions include, among other things, advance notice for raising business or making nominations at meetings and "blank check"

preferred stock.

Our certificate of incorporation and by- laws contain several provisions that may make it more difficult for a third party to acquire control of us without the approval of our Board.

These provisions include, among other things, advance notice for raising business or making nominations at meetings and "blank check" preferred stock.

Blank check preferred stock enables our Board, without approval of the shareholders, to designate and issue additional series of preferred stock with such dividend, liquidation, conversion, voting or other rights, including the right to issue convertible securities with no limitations on conversion, as our Board may determine.

1 unchanged sentence

These provisions may make it more difficult or expensive for a third party to acquire a majority of our outstanding common stock.

These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our stockholders receiving a premium over the market price for their common stock.

These provisions also may delay, prevent or deter a merger, acquisition, tender offer, proxy contest or other transaction that might otherwise result in our shareholders receiving a premium over the market price for their common stock.

If we issue preferred shares in the future that have a preference over our common stock with respect to dividends or upon liquidation, dissolution or winding up, or if we issue preferred shares with voting rights that dilute the voting power of our common stock, the rights of our common stockholders or the market price of our common stock may be adversely affected.

The Delaware General Corporation Law prohibits us from engaging in "business combinations"

with "interested shareholders"

(with some exceptions) unless such transaction is approved in a prescribed manner.

The Delaware General Corporation Law prohibits us from engaging in "business combinations" with "interested shareholders" (with some exceptions) unless such transaction is approved in a prescribed manner.

The existence of this provision could have an anti-takeover effect with respect to transactions not approved in advance by the Board, including discouraging attempts that might result in a premium over the market price for our common stock.

There can be no assurance that we will continue to pay dividends on our common stock or repurchase our common stock up to the maximum amounts permitted under our previously announced repurchase program.

Payment of cash dividends on our common stock or repurchases of our common stock are subject to compliance with applicable laws and depends on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, business prospects, macro-economic conditions and other factors that our Board may deem relevant.

indebtedness, capital requirements, business prospects, macro-economic conditions and other factors that our Board may deem relevant.

There can be no assurance that we will continue to pay dividends or repurchase our common stock at the same levels we have historically (if at all).

8 unchanged sentences

The Company is responsible for establishing and maintaining effective internal control over financial reporting.

This includes establishing controls around the adoption of new, or changes in existing, accounting policies and practices.

Despite its inherent limitations, effective internal control over financial reporting helps provide reasonable assurance regarding the reliability of financial reporting for external purposes.

A significant accounting error correction, financial reporting failure or material weakness in internal control over financial reporting could cause results in our consolidated financial statements that do not accurately reflect our financial condition, a loss of investor confidence and subsequent decline in the market price of our common stock, increase our costs and regulatory scrutiny, and lead to litigation or result in negative publicity that could damage our reputation.

ITEM 1B—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.

What changed 10-K

Item 1A. Risk Factors