Lucky Strike Entertainment (LUCK) risk factors, FY2024 10-K

Risks Related to Our Business and Industry

1. 01If we are unable to successfully design and execute our business strategy plan, including growing comparable location sales, our revenues and profitability may be adversely affected
2. 02Changes in consumer buying patterns and economic slowdowns could negatively affect our results of operations
3. 03We may not be able to compete favorably in the highly competitive out-of-home and home-based entertainment markets, which could have a material adverse effect on our business, results of operations or financial condition
4. 04Index to Financial Statements
5. 05Unfavorable publicity or a failure to respond effectively to adverse publicity, could harm our business
6. 06We are subject to risks associated with leasing space subject to long-term, non-cancelable leases
7. 07Our financial performance and the ability to implement successfully our strategic direction could be adversely affected if we fail to retain, or effectively respond, to a loss of key management
8. 08We face risks related to our substantial indebtedness and limitations on future sources of liquidity
9. 09Covenants in our debt agreements restrict our business and could limit our ability to implement our business plan
10. 10Our failure to continue to build and maintain our brand of entertainment could adversely affect our operating results

Risks Related to Information Technology and Cybersecurity

1. 11Information technology system failures or interruptions may impact our ability to effectively operate our business
2. 12Cybersecurity breaches or other privacy or data security incidents that expose confidential customer, personal employee or other material, confidential information that is stored in our information systems or by third parties on our behalf may impact our business
3. 13level of Payment Card Industry Data Security Standard (“PCI”) compliance at our corporate office and locations. 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
4. 14Our reliance on computer systems and software could expose us to material financial and reputational harm if any of those computer systems or software were subject to any material disruption or corruption

Risks Related to the Location-Based Entertainment Industry

1. 15Our success depends upon our ability to recruit and retain qualified location management and operating personnel while also controlling our labor costs
2. 16We may be subject to increased labor and insurance costs
3. 17Our revenues and operating results may fluctuate significantly due to various risks and unforeseen circumstances, including natural disasters, public health emergencies, acts of violence or terrorism, seasonality, weather, and other factors outside our control
4. 18Our operations are susceptible to the changes in cost and availability of commodities and other products, which could negatively affect our operating results
5. 19We may not be able to operate our locations or obtain/maintain licenses and permits necessary for such operation, in compliance with laws, regulations and other requirements, which could adversely affect our business, results of operations or financial condition
6. 20We are subject to various federal, state, and local laws and regulations that govern numerous aspects of our business
7. 21Litigation, including allegations of illegal, unfair or inconsistent employment practices, may adversely affect our business, results of operations or financial condition
8. 22Failure to adequately protect our intellectual property could harm our business
9. 23Changes in tax laws and resulting regulations could result in changes to our tax provisions and subject us to additional tax liabilities that could materially adversely affect our financial performance
10. 24Our ability to use net operating loss carryforwards and other tax attributes may be limited in connection with the Business Combination or other ownership changes
11. 25Our only significant assets are our ownership interests in our operating subsidiaries and such ownership may not be sufficient to pay dividends or make distributions or loans to enable us to pay any dividends on our common stock or satisfy our other financial obligations
12. 26The price of our Class A common stock may be volatile
13. 27We have discretion over payment of any cash dividends
14. 28We may be subject to securities litigation, which is expensive and could divert management attention
15. 29The obligations associated with being a public company involve significant expenses and require significant resources and management attention, which may be diverted from our business operations
16. 30Delaware law and our organization documents contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable
17. 31Our certificate of incorporation contains a provision renouncing our interest and expectancy in certain corporate opportunities
18. 32We cannot predict the impact that our dual class structure may have on the stock price of our Class A common stock
19. 33In addition, pursuant to the Stockholders Agreement (as defined below), Mr. Shannon and Atairos have board designation rights and Atairos also has certain consent rights as described below
20. 34Bowlero’s founder and Chief Executive Officer and Atairos have certain board nomination rights that enable them to exercise substantial control over all corporate actions, which could limit your ability to influence the outcome of matters submitted to stockholders for a vote
21. 35We are a “controlled company” within the meaning of the rules of the New York Stock Exchange (“NYSE”). As a result, we qualify for exemptions from certain corporate governance requirements that would otherwise provide protection to stockholders of other companies