Cracker Barrel Old Country Store (CBRL) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01Pandemics, epidemics, endemics, and other public health concerns, or government regulation relating to the consumption of food products and widespread infectious diseases could reduce consumer traffic and could have a material adverse effect on our results of operations
2. 02In 2024, we announced a strategic transformation plan to enhance our menu and retail offerings, support our brand, improve operating margins and improve the efficiencies and effectiveness of our operations. Failure to achieve or sustain these plans could adversely affect our results of operations
3. 03We face intense competition, and if we are unable to continue to compete effectively, our business, financial condition and results of operations may be adversely affected
4. 04Unfavorable publicity could harm our business. In addition, our failure to recognize, respond to and effectively manage the impact of social media could materially impact our business
5. 05Failure to maximize or to successfully assert our intellectual property rights could adversely affect our business and results of operations

Risks Related to our Capital Structure

1. 06We 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 may limit our ability to repurchase the Notes or pay cash upon their conversion
2. 07Provisions in the indenture governing the Notes could delay or discourage a takeover of us
3. 08The convertible note hedge and warrant transactions may affect the value of the notes and our common stock
4. 09We are subject to counterparty risk with respect to the convertible note hedge transactions
5. 10Conversion of the Notes or exercise of the warrants evidenced by the warrant transactions may dilute the ownership interest of existing shareholders, including noteholders who have previously converted their Notes

Risks Related to Supply Chains

1. 11Our reliance on certain significant vendors, particularly for foreign-sourced retail products, subjects us to numerous risks, including possible interruptions in supply, which could adversely affect our business
2. 12Our ability to manage our retail inventory levels and changes in merchandise mix may adversely affect our business
3. 13Our risks are heightened because of our single retail distribution facility and our potential inability or failure to execute on a comprehensive business continuity plan following a major disaster at or near our corporate facility could adversely affect our business

Risks Related to IT Systems, Cybersecurity and Data Privacy

1. 14A material disruption in our information technology, network infrastructure and telecommunication systems could have a material adverse effect on our business and results of operations
2. 15If we fail or our vendors fail to comply with privacy and data protection laws or our systems are compromised, our operations could be negatively impacted and we could be subject to litigation and adverse publicity
3. 16We outsource certain business processes to third-party vendors that subject us to risks, including disruptions in business and increased costs; our use of third-party technologies has increased and if we are unable to maintain our rights to these technologies our business may be harmed

Legal and Regulatory Risks

1. 17We are subject to a number of risks relating to federal, state and local regulation of our business, including the areas of health care reform and environmental matters, and an insufficient or ineffective response to government regulation may increase our costs and decrease our profit margins
2. 18Our advertising is heavily dependent on billboards, which are highly regulated, and our evolving marketing strategy involves increased advertising and marketing costs that could adversely affect our results of operations
3. 19Litigation may adversely affect our business, financial condition and results of operations
4. 20Our business could be negatively affected as a result of actions of activist shareholders
5. 21Provisions in our charter, Tennessee law and our shareholder rights agreement may discourage potential acquirers of the Company

Risks Related to Our Business Strategy

1. 22Failure to adequately address environmental, social and governance (“ESG”) matters, could adversely affect our brand, business, results of operations and financial condition
2. 23We are dependent upon attracting and retaining qualified employees while also controlling labor costs
3. 24The loss of key executives or difficulties in recruiting and retaining qualified personnel could jeopardize our future growth and success
4. 25We may pursue strategic investments or initiatives now or in the future, which may not yield their expected benefits, resulting in a loss of some or all of our investment
5. 26Individual store locations are affected by local conditions that could change and adversely affect the carrying value of those locations
6. 27One of the means of achieving our growth objectives is opening and operating new and profitable stores. This strategy involves numerous risks, and we may not be able to open all of our planned new stores and the new stores that we open may not be profitable or as profitable as our existing stores
7. 28General economic, business and societal conditions as well as those specific to the restaurant or retail industries that are largely out of our control may have a material adverse effect on our business, financial condition and results of operations
8. 29Our business is somewhat seasonal and also can be affected by extreme weather conditions and natural disasters, social unrest or other catastrophic events
9. 30Our current insurance programs may expose us to unexpected costs, which could have a material adverse effect on our financial condition and results of operations
10. 31Our annual and quarterly operating results may fluctuate significantly and could fall below the expectations of investors and securities analysts due to a number of factors, some of which are beyond our control, resulting either in volatility or a decline in the price of our securities
11. 32Our reported results can be affected adversely and unexpectedly by the implementation of new, or changes in the interpretation of existing, accounting principles or financial reporting requirements
12. 33Failure of our internal control over financial reporting could adversely affect our business and financial results