Risks Specific to Boardwalk Hospitality
1. We may have difficulty in judging consumer taste preferences, which could result in reduced sales, excess inventory, spoilage and lower margins. Our sales may be adversely affected if we fail to respond to changes in consumer preferences in a timely manner.
2. Significant increases in the price of raw materials, transportation or labor, if not offset by declines in other input costs, or a reduction or interruption in the delivery of raw materials, supplies and finished products from our vendors could negatively impact our financial results.
3. We are located in Los Angeles County and Increases in the minimum wage rate for hourly employees are scheduled over the next five years. These increases, if not offset by increased prices, declines in other input costs or decreases in the number of hours scheduled may have a negative impact on our financial results.
4. Our business depends in large part on the success and reputation of the brand ‘Ben & Jerry’s’ as well as the reputation of, and decisions by, corporate management and other franchisees. Our reputation may be harmed by actions taken by third parties that are outside our control.
5. We compete for the discretionary income of consumers and are susceptible to changes in the overall economy of the United States and other markets where our products are sold. Many of our consumers are tourists and a reduction in travel budgets could result in decreased sales of our products, resulting in a negative impact to our overall profitability.
6. If Ben & Jerry’s is not able to adequately protect their proprietary intellectual property and information, our results of operations could be adversely affected.
7. Our fixed costs, primarily monthly lease payments on our location, are a significant expense and a reduction of our revenue could adversely impact our ability to maintain positive cash flow resulting in our inability to make timely payments to our vendors.
8. Our industry is highly competitive and competitive conditions may adversely affect our revenues and overall profitability.
9. Our failure to successfully market and advertise our products could have an adverse effect on our business, financial condition and results of operations.
10. Our financial results fluctuate from quarter to quarter, and sales are impacted by season.
11. The Company is subject to various laws and government regulations, violation of which could subject it to sanctions. In addition, changes in such laws and regulations may lead to increased costs, changes in our effective tax rate or the interruption of normal business operations that would negatively impact our financial condition and results of operations.
12. Product recalls, product liability claims, absence or cost of insurance and associated costs could increase governmental scrutiny, divert resources, reduce sales and increase costs and could have a significant adverse effect on our financial condition and adversely affect our business operations, decrease sales and increase costs. Recalls may also increase competitive pressure from our competitors.
13. We depend on key personnel and may not be able to hire, retain or integrate sufficient qualified personnel to maintain and expand our business.
14. Business interruptions could adversely affect our operations. Our operations are vulnerable to outages and interruptions due to fire, floods, power loss, telecommunications failures and similar events beyond our control. The location of our business is in California extremely close to the Pacific Ocean and weather conditions, earthquakes and tsunamis could adversely impact our ability to operate our business at the current location.