Texas Roadhouse (TXRH) risk factors, FY2024 10-K

Risks Related to our Growth and Operating Strategy

1. 01Our growth strategy, which primarily depends on our ability to open new restaurants that are profitable, is subject to many factors, some of which are beyond our control
2. 02You should not rely on past changes in our average unit volume or our comparable restaurant sales as an indication of our future results of operations because they may fluctuate significantly
3. 03The development and/or acquisition of additional restaurant concepts may not contribute to our growth
4. 04Our expansion into international markets presents increased economic, political, regulatory, and other risks
5. 05Our failure to manage any of these risks successfully could harm our future international operations and our overall business and results of our operations
6. 06Acquisition of existing restaurants from our domestic franchisees and other strategic initiatives may have unanticipated consequences that could harm our business and our financial condition
7. 07Approximately 21% of our company restaurants are located in Texas and Florida and, as a result, we are sensitive to economic and other trends and developments in those states
8. 08Our franchisees could take actions that could harm our business
9. 09Decreased cash flow from operations, or an inability to access credit, could negatively affect our business initiatives or may result in our inability to execute our revenue, expense, and capital allocation strategies
10. 10Our existing credit facility limits our ability to incur additional debt
11. 11We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases, as well as risks related to renewal
12. 12We may be required to record impairment charges in the future

Risks Related to Consumer Discretionary Spending and Macroeconomic Conditions

1. 13Changes in consumer preferences and discretionary spending could adversely affect our business
2. 14Our objective to increase sales and profits at existing restaurants could be adversely affected by macroeconomic conditions

Risks Related to Government Regulation and Litigation

1. 15We may not be able to obtain and maintain licenses and permits necessary to operate our restaurants and compliance with governmental laws and regulations could adversely affect our operating results
2. 16We are subject to increasing legal complexity and could be party to litigation that could adversely affect us
3. 17Litigation involving our relationship with franchisees and the legal distinction between our franchisees and us for employment law purposes, if determined adversely, could increase costs, negatively impact the business prospects of our franchisees, and subject us to incremental liability for their actions
4. 18Our current insurance may not provide adequate levels of coverage against claims
5. 19Changes in tax laws and unanticipated tax liabilities could adversely affect our financial results
6. 20Failure to properly address environmental, social, and/or governance ("ESG ") matters could adversely affect our brand, business, results of operations, and financial condition

Risks Related to Human Capital

1. 21Failure to retain the services of our key management personnel, to successfully execute succession planning, or attract additional qualified personnel could harm our business
2. 22Our business could be adversely affected by increased labor costs or labor shortages

Risks Related to Technology, Privacy and Intellectual Property

1. 23We rely heavily on information technology, and any material failure, weakness, cybersecurity breach, or other interruption could prevent us from effectively operating our business
2. 24We outsource certain business processes to third-party vendors that subject us to risks, including disruptions in business and increased costs
3. 25We may incur increased costs to comply with privacy and data protection laws and, if we fail to comply or our systems are compromised by a security breach, we could be subject to government enforcement actions, private litigation, and adverse publicity
4. 26Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand
5. 27us to incur significant legal fees. Our inability to register or protect our marks and other proprietary rights in foreign jurisdictions could adversely affect our competitive position in international markets

Risks Related to the Restaurant Industry

1. 28Changes in food and supply costs and/or availability of products could adversely affect our results of operations
2. 29Our success depends on our ability to compete with many food service businesses
3. 30The food service industry is affected by litigation and publicity concerning food quality, health, and other issues, which could cause guests to avoid our restaurants and could result in significant liabilities or litigation costs
4. 31Health, social and environmental concerns relating to the consumption or sourcing of beef or other food products could affect consumer preferences and could negatively impact our results of operations
5. 32Food safety and sanitation, food-borne illness, and health concerns may have an adverse effect on our business by reducing demand and increasing costs
6. 33Our business could be adversely affected by our inability to respond to or effectively manage social media

Risks Related to Stock Ownership and Our Corporate Structure

1. 34Provisions in our charter documents and Delaware law may delay or prevent our acquisition by a third party
2. 35There can be no assurance that we will continue to pay dividends on our common stock or repurchase our common stock up to the maximum amounts permitted under our previously announced repurchase program
3. 36Our business could be negatively affected as a result of actions of activist shareholders, and such activism could impact the trading value of our common stock
4. 37Failure to achieve and maintain effective internal control over financial reporting may negatively impact our business and our financial results