Cheesecake Factory (CAKE) risk factors, FY2024 10-K

Risks Related to the Restaurant Industry

1. 01The impact global and domestic economic conditions have on consumer discretionary spending and our costs of operations could materially adversely affect our financial performance
2. 02Our inability to grow comparable restaurant sales could materially adversely affect our financial performance
3. 03Our greatest asset is the value of our brands, which is directly linked to our reputation. We must protect our reputation in order to continue to be successful and to grow the value of our brands domestically and internationally
4. 04In past years we have experienced and may again experience significant labor cost inflation, which has and may in the future significantly increase our cost of doing business
5. 05Changes in, or any failure to comply with, applicable laws or regulations could materially adversely affect our ability to operate our restaurants and/or increase our cost to do so, which could materially adversely affect our financial performance
6. 06Our international business exposes us to additional laws and regulations, including antitrust and tax requirements, anti-boycott legislation, import/export and customs regulations and other international trade regulations, privacy laws, the USA Patriot Act and the Foreign Corrupt Practices Act
7. 07legal citizenship or residency requirements could result in a disruption in our work force, sanctions against us and adverse publicity, any of which could materially adversely affect our financial performance
8. 08Labor organizing could harm our operations and competitive position in the restaurant industry, which could materially adversely affect our financial performance
9. 09Our inability to respond appropriately to changes in consumer health and disclosure regulations, and to adapt to evolving consumer dining preferences, could negatively impact our operations and competitive position, which could materially adversely affect our financial performance
10. 10Our failure to effectively develop, grow and operate North Italia, Flower Child and our other branded concepts could materially adversely affect our financial performance
11. 11Adverse weather conditions, natural disasters and public health emergencies could unfavorably impact our restaurant sales, which could materially adversely affect our financial performance
12. 12Acts of violence at or threatened against our restaurants or the centers in which they are located, including civil unrest, customer intimidation, active shooter situations and terrorism, could unfavorably impact our restaurant sales, which could materially adversely affect our financial performance

Risks Related to Our Business

1. 13Our inability to anticipate and react effectively to changes in the costs of key operating resources may increase our cost of doing business, which could materially adversely affect our financial performance
2. 14Our financial performance could be materially adversely affected if we fail to retain, or effectively respond to a loss of, key executives
3. 15If we are unable to staff and retain qualified restaurant management and operating personnel 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
4. 16If any of our third-party vendors experiences a failure that affects a significant aspect of our business, we may experience data loss, increased costs, operational disruption or other harm, any of which could materially adversely affect our financial performance
5. 17We may incur additional costs if we are unable to renew our restaurant leases on similar terms and conditions, or at all, or to relocate our restaurants in certain trade areas, which could materially adversely affect our financial performance
6. 18Any inability to effectively use and manage social media could harm our marketing efforts as well as our reputation, which could materially adversely affect our financial performance
7. 19Our failure to adequately protect our intellectual property could materially adversely affect our financial performance
8. 20We face a variety of risks and challenges related to our international operations and global brand development efforts, any of which could materially adversely affect our financial performance
9. 21Our inability to secure an adequate number of high-quality sites for future restaurant openings could adversely affect our ability to grow our business
10. 22We may engage in expansion opportunities or other initiatives which may create risks to our business that could materially adversely affect our financial performance
11. 23If we do not appropriately scale our infrastructure in a timely manner, we may be unable to respond to and support our domestic or international opportunities for growth, which could materially adversely affect our financial performance
12. 24We have and may again be required to record impairment charges, be unable to fully recoup landlord improvement allowances and/or decide to discontinue operations at certain restaurants, any of which could materially adversely affect our financial performance
13. 25If we are unable to manage risks related to our business, costs associated with litigation and insurance could increase, which could materially adversely affect our financial performance
14. 26Our inability or failure to execute on comprehensive business continuity and disaster recovery plans following a major disaster or disruption could interfere with our business operations, which could materially adversely affect our financial performance
15. 27Failure to appropriately address environmental and social matters could adversely affect our brand, business, results of operations and financial condition
16. 28and, in turn, may adversely impact our business, operating results, and financial condition. Environmental and social matters have also been the subject of increased scrutiny by regulators in different jurisdictions which may expose us to potential regulatory scrutiny or enforcement actions related to these activities

Risks Related to Information Technology and Cybersecurity

1. 29Information technology system failures or breaches of our network security could interrupt our operations and subject us to increased operating costs, as well as to litigation and other liabilities, any of which could materially adversely affect our financial performance
2. 30We and our third-party vendors have experienced Cybersecurity Incidents and we expect such attacks and incidents to continue in varying degrees. We cannot provide assurances that future cyber incidents will not occur or that they will not materially adversely affect our business and financial performance

Risks Related to Our Indebtedness

1. 31On October 6, 2022, we entered into a Fourth Amended and Restated Loan Agreement (the “Loan Agreement” and the credit facility provided thereunder, the “Revolver Facility”)
2. 32The issuance or sale of shares of our common stock, or rights to acquire shares of our common stock, could depress the trading price of our common stock and the Notes
3. 33Hedging activity by investors in the Notes could depress the trading price of our common stock
4. 34Provisions in the indenture governing the Notes could delay or prevent an otherwise beneficial takeover of us
5. 35We may be unable to raise the funds necessary to repurchase the Notes for cash following a fundamental change, or to pay the cash amounts due upon conversion, and our other indebtedness limits our ability to repurchase the Notes or pay cash upon their conversion

Risks Related to Owning Our Stock

1. 36The market price of our common stock is subject to volatility
2. 37Our stock price could be adversely affected if our performance falls short of our financial guidance and/or market expectations
3. 38Our stock price could be adversely affected if we are unable to pay or increase dividends
4. 39We cannot guarantee that our share repurchase program will be utilized to the full value approved or that it will enhance long-term stockholder value
5. 40Our stock price could be adversely affected by future sales or other dilution of our equity
6. 41Changes in tax laws and resulting regulations could result in changes to our tax provisions and expose us to additional tax liabilities that could materially adversely affect our financial performance
7. 42Our business and stock price could be adversely affected by the actions of activist investors