Dominos Pizza (DPZ) risk factors, FY2025 10-K

Business, Operational and Industry Risks

1. 01The quick service restaurant (“QSR”) pizza category and the food service and food delivery markets in general are highly competitive and such competition could adversely affect our operating results27% rewritten
2. 02currency fluctuations and geopolitical considerations related to international operations33% rewritten
3. 03If we fail to successfully implement our growth strategy, which includes opening new stores and generating more sales, our ability to increase our revenues and operating profits could be adversely affected
4. 04general economic and business conditions, including increases in food costs, build costs and labor costs or pressured consumer spending, which could impact profitability and demand for new stores
5. 05Increases in food, labor and other costs, labor shortages or negative economic conditions could adversely affect our profitability and operating results86% rewritten
6. 06Health epidemics or pandemics have in the past and may in the future impact macroeconomic conditions, consumer behavior, labor availability and supply chain management, as well as local operations in impacted marketsNew
7. 07Shortages, interruptions or disruptions in the supply or delivery of fresh food products and store equipment could adversely affect our operating results
8. 08The food service market is affected by consumer preferences and perceptions. Changes in these preferences and perceptions may reduce the demand for our products, which would reduce sales and harm our business28% rewritten
9. 09Reports of product contamination, food-borne illness or food tampering or other events which may impact our reputation may reduce sales and harm our business
10. 10We do not have long-term contracts with certain of our suppliers, or have contracts which are set to expire, and as a result they could seek to significantly increase prices or fail to deliver
11. 11Any prolonged disruption in the operations of any of our dough manufacturing and supply chain centers could harm our business
12. 12Our international operations subject us to additional risk. Such risks and costs may differ in each country in which we and our franchisees do business and may cause our profitability to decline due to increased costs24% rewritten
13. 13Our earnings and business growth strategies depend on the success of our franchisees, and we may be harmed by actions taken by our franchisees, or employees of our franchisees, which are outside of our control23% rewritten
14. 14If we were to be unable or fail to recognize, respond to and effectively manage the accelerated impact of social media and/or generative artificial intelligence (“AI”) or become the subject of a boycott, our business could be adversely impacted
15. 15Our success depends in part upon effective advertising, and lower advertising funds may reduce our ability to adequately market the Domino’s Pizza brand
16. 16Loss of key employees or our inability to attract and retain new qualified employees could hurt our business and inhibit our ability to operate and grow successfully
17. 17We may not be able to adequately protect our intellectual property, which could harm the value of our brand and branded products and adversely affect our business
18. 18The occurrence of cyber incidents, or a deficiency in cybersecurity, could negatively impact our business by causing a disruption to our operations, a compromise or corruption of confidential information, or damage to our employee and business relationships, any of which could subject us to loss and harm our brand
19. 19We cannot predict the impact that new or improved technologies, alternative methods of delivery or changes in consumer or employee behavior facilitated by these technologies and alternative methods of delivery will have on our business
20. 20We are subject to a variety of additional risks associated with our franchise system and franchisees
21. 21Our current insurance coverage may not be adequate, insurance premiums for such coverage may increase and we may not be able to obtain insurance at acceptable rates, or at all
22. 22Environmental, social and governance matters may impact our business and reputation

Risks Related to Our Indebtedness

1. 23Our substantial indebtedness could adversely affect our business and limit our ability to plan for or respond to changes in our business
2. 24limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate, thereby placing us at a competitive disadvantage compared to our peers that may have less debt
3. 25Downgrades in our credit ratings could impact our ability to access capital and materially and adversely affect our business, financial condition and results of operations
4. 26We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which would adversely affect our financial condition and results of operations
5. 27The terms of our securitized debt financing of certain of our wholly-owned subsidiaries have restrictive terms and our failure to comply with any of these terms could put us in default, which would have an adverse effect on our business and prospects
6. 28enter into transactions with affiliates40% rewritten

Regulatory, Legal and Compliance Risks

1. 29We and our franchisees are subject to extensive laws and government regulation and requirements issued by other groups and our failure to comply with existing or increased laws and regulations could adversely affect our business and operating results
2. 30It is uncertain how the policy priorities and initiatives of the current administration may impact the federal laws and regulations to which we are subject, and we are not able to predict the impact such changes may have on our business
3. 31We may also become subject to legislation or regulation seeking to tax and/or regulate certain foods deemed to be “unhealthy,” and our capital expenditures could increase due to remediation and compliance measures related to any such laws or regulations

Market and General Risks

1. 32Fluctuations in value of the U.S. dollar in relation to other currencies may lead to lower revenues and earnings22% rewritten
2. 33Our annual and quarterly financial results are subject to significant fluctuations depending on various factors, many of which are beyond our control, and if we fail to meet the expectations of securities analysts or investors, our stock price may decline significantly or be subject to significant fluctuations
3. 34foreign currency exposure