Papa Johns International (PZZA) risk factors, FY2024 10-K

Industry and Macroeconomic Risks

1. 01Economic conditions in the United State and international markets could adversely affect our business and financial results
2. 02Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by actual and potential geopolitical conflicts
3. 03resulting in decreased development prospects, sales and profitability. The Company is unable to predict how long the current environment will last or the long-term impact to these franchised locations
4. 04Our International operations and franchisees are subject to increased risks and other factors that may make it more difficult to achieve or maintain profitability or meet planned growth rates
5. 05Our profitability may suffer as a result of intense competition in the QSR industry
6. 06We compete within the food service market and the QSR pizza market not only for customers, but also for management and hourly employees, including restaurant team members, drivers and qualified franchisees, as well as suitable real estate sites
7. 07Changes in consumer preferences or discretionary consumer spending could adversely impact our results
8. 08Food safety and quality concerns may negatively impact our business and profitability
9. 09We are subject to risks related to epidemic and pandemic outbreaks, such as the global COVID-19 pandemic, which had adverse impacts on global economic and market conditions, franchisees, and our business
10. 10Failure to preserve the value and relevance of our brand could have a negative impact on our financial results
11. 11Our inability or failure to recognize, respond to and effectively manage the accelerated impact of social media, influencers, and/or shareholder activism could adversely impact our business
12. 12Our franchise business model presents a number of risks
13. 13We may be adversely impacted by increases in the cost of food ingredients and other costs
14. 14Changes in privacy or data protection laws could adversely affect our ability to market our products effectively
15. 15Our business depends on the proper allocation of our human capital and our ability to attract and retain talented management and other key employees
16. 16We rely on information technology to operate our businesses and maintain our competitiveness, and any failure to invest in or adapt to technological developments or industry trends could harm our business
17. 17We cannot predict the impact that new or improved technologies, alternative methods of delivery, including autonomous vehicle delivery, or changes in consumer or employee behavior facilitated by these technologies and alternative methods of delivery will have on our business
18. 18Our reorganization activities may increase our expenses, may not be successful, and may adversely impact employee hiring and retention
19. 19We may not be able to effectively market our products or maintain key marketing partnerships
20. 20We may not be able to execute our strategy or achieve our planned growth targets, which could negatively impact our business and our financial results
21. 21Our dependence on a sole supplier or a limited number of suppliers for some ingredients and other supplies could result in disruptions to our business
22. 22Increase in ingredient and other operating costs, including those caused by weather, climate change and food safety, could adversely affect our results of operations
23. 23We rely on third parties for certain business processes and services, and failure or inability of such third-party vendors to perform subjects us to risks, including business disruption and increased costs
24. 24Changes in purchasing practices by our Domestic franchisees, or prolonged disruptions in our QC Center operations, could harm our commissary business
25. 25Our current insurance may not be adequate and we may experience claims in excess of our reserves

Risks Related to our Indebtedness

1. 26The agreements governing our debt, including the Indenture governing our Notes and the Credit Agreement, contain various covenants that impose restrictions on us
2. 27These restrictions on our ability to operate our business could seriously harm our business by, among other things, limiting our ability to take advantage of financing, merger and acquisition and other corporate opportunities
3. 28We are exposed to variable interest rates under our Credit Agreement, and increases in interest rates would also increase our debt service costs and could have a material negative impact our profitability

General Risks

1. 29Natural disasters, hostilities, social unrest, severe weather and other catastrophic events may disrupt our operations or supply chain
2. 30Climate change may have an adverse impact on our business
3. 31Increasingly complex laws and regulations, and any changes to law and regulations, could adversely affect our business
4. 32Disruptions to our critical business or information technology systems could harm our ability to compete and conduct our business
5. 33Failure to maintain the integrity of internal or customer data could result in damage to our reputation, loss of sales, and/or subject us to litigation, penalties or significant costs
6. 34We have been and will continue to be subject to various types of investigations and litigation, including collective and class action litigation, which could subject us to significant damages or other remedies
7. 35We may not be able to adequately protect our intellectual property rights, which could negatively affect our results of operations
8. 36We have been and may be subject to impairment charges
9. 37We operate globally and changes in tax laws could adversely affect our results