ONE Group Hospitality (STKS) risk factors, FY2025 10-K

Other

1. 01Our business is dependent on discretionary spending patterns, business travel and general economic conditions
2. 02We operate multiple venues in some cities and are therefore sensitive to economic and other trends and developments in these cities
3. 03Competition in the restaurant industry is intense
4. 04Failure to adapt to evolving consumer dining preferences could negatively impact our operations and competitive position, which could materially adversely affect our business and results of operationsNew
5. 05Health concerns arising from outbreaks of flu viruses or other diseases, or regional or global health pandemics could severely affect our business
6. 06Failure to protect food supplies and adhere to food safety standards could result in food borne illnesses and adversely affect our business
7. 07Changes to wage, immigration and labor laws could increase our costs substantially
8. 08The loss of key personnel or difficulties recruiting and retaining qualified personnel could adversely affect our business and financial results
9. 09We occupy most of our restaurants and some of our food and beverage hospitality services locations under long-term non-cancelable leases under which we may remain obligated to perform even if we close those operations, and we may be unable to renew leases at the end of their terms
10. 10We depend upon frequent deliveries of food, alcohol and other supplies, which subjects us to the possible risks of shortages, interruptions and price fluctuations
11. 11Increases in commodity prices would adversely affect our results of operations
12. 12The imposition of new or increased tariffs could adversely affect our business and results of operations42% rewritten
13. 13Unsuccessful implementation of any or all of the initiatives of our business strategy, including opening new restaurants and attracting new F&B hospitality service opportunities, could negatively impact our operations
14. 14We rely in part on our licensees and franchisees and the manner in which they operate the STK and Benihana restaurants to develop and promote our business. As of December 28, 2025, we had five licensed STK restaurants and twelve franchised Benihana restaurants
15. 15To the extent that our operations are located in hotels, casinos or similar destinations, our results of operations and growth are subject to the risks facing such venues
16. 16We face the risk of adverse publicity in connection with our operations, including as a result of increased social media usage23% rewritten
17. 17We face the risk of litigation in connection with our operations
18. 18We may not be able to protect our brands, trademarks, service marks or other proprietary rights
19. 19Negative publicity relating to a Benihana restaurant operated by an unrelated entity may have a material adverse effect on our business and results of operations
20. 20Security breaches, loss of data and other disruptions could compromise sensitive information related to our business, prevent us from accessing critical information or expose us to liability, which could adversely affect our business and our reputation
21. 21We rely heavily on information technology systems and failures or interruptions in our IT systems could harm our ability to effectively operate our business and/or result in the loss of guests or employees

Other Risks

1. 22We have a debt financing arrangement and preferred stock outstanding that could have a material adverse effect on our financial health and our ability to obtain financing in the future and may impair our ability to react quickly to changes in our business
2. 23We may also incur additional indebtedness in the future, which could materially increase the impact of these risks on our financial condition and results of operations
3. 24Our acquisition of Safflower Holdings Corp., as well as any future acquisitions, may have unanticipated consequences that could harm our business and our financial condition
4. 25Our operations may be negatively impacted by seasonality, adverse weather conditions, natural disasters or acts of terror
5. 26Terrorism, including cyber-terrorism or efforts to tamper with food supplies, could have an adverse impact on our brand and results of operations
6. 27We may not be able to comply with certain debt covenants on our debt
7. 28Failure of our internal controls over financial reporting could harm our business and financial results21% rewritten
8. 29Insiders have substantial control over us, and they could delay or prevent a change in our corporate control even if our other stockholders wanted it to occur
9. 30Provisions in our amended and restated certificate of incorporation, our bylaws and Delaware law may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our common stock and could entrench management23% rewritten
10. 31The price of our common stock could be subject to volatility related or unrelated to our operations