Want to see RRGB full AI Analyst Report?
Risk Overview Q2, 2026
Risk Distribution
30% Finance & Corporate
27% Production
14% Ability to Sell
11% Tech & Innovation
11% Legal & Regulatory
8% Macro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
This chart displays the stock's most recent risk distribution according to category. TipRanks has identified 6 major categories: Finance & corporate, legal & regulatory, macro & political, production, tech & innovation, and ability to sell.
Risk Change Over Time
S&P500 Average
Sector Average
Risks removed
Risks added
Risks changed
Red Robin Gourmet Risk Factors
New Risk (0)
Risk Changed (0)
Risk Removed (0)
No changes from previous report
The chart shows the number of risks a company has disclosed. You can compare this to the sector average or S&P 500 average.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
The quarters shown in the chart are according to the calendar year (January to December). Businesses set their own financial calendar, known as a fiscal year. For example, Walmart ends their financial year at the end of January to accommodate the holiday season.
Risk Highlights Q2, 2026
Main Risk Category
Finance & Corporate
With 11 Risks
Finance & Corporate
With 11 Risks
Number of Disclosed Risks
37
No changes from last report
S&P 500 Average: 31
37
No changes from last report
S&P 500 Average: 31
Recent Changes
0Risks added
0Risks removed
2Risks changed
Since Jul 2026
0Risks added
0Risks removed
2Risks changed
Since Jul 2026
Number of Risk Changed
2
+2
From last reportS&P 500 Average: 1
2
+2
From last reportS&P 500 Average: 1
See the risk highlights of Red Robin Gourmet in the last period.
Risk Word Cloud
The most common phrases about risk factors from the most recent report. Larger texts indicate more widely used phrases.
Risk Factors Full Breakdown - Total Risks 37
Finance & Corporate
Total Risks: 11/37 (30%)Below Sector Average
Share Price & Shareholder Rights3 | 8.1%
Share Price & Shareholder Rights - Risk 1
Our ability to attract, motivate, and retain our management team and key personnel may be affected by the market price of our common stock and the availability of shares under our equity compensation plan, and we may need to provide alternative compensation incentives.Share Price & Shareholder Rights - Risk 2
The market price of our common stock is subject to volatility, which has and may continue to attract the interest of activist stockholders or subject us to securities litigation, which could cause us to incur significant expenses, divert management attention, hinder execution of our strategy, and impact our stock price.The market price of our common stock has experienced volatility and historic lows, and may continue to fluctuate significantly due to a number of factors, including actual or anticipated variations in our operating results or those of our competitors as compared to analyst expectations, changes in financial estimates or recommendations by research analysts, and announcements of significant transactions or strategic initiatives by us or other companies in the restaurant industry. In addition, the equity markets have experienced price and volume fluctuations that affect the stock price of companies in ways unrelated to the operating performance of individual companies.
Such volatility has recently, and may in the future, attract the interest of activist stockholders seeking to influence our strategic direction, governance practices, operations, or capital allocation decisions. In addition, volatility in stock prices could in the future result in securities class action litigation. Responding to activist stockholder activity or securities litigation is costly and time-consuming and diverts management and Board attention from executing our strategy. The uncertainty associated with such matters could further contribute to volatility in the market price of our common stock and adversely affect stockholder value.
Share Price & Shareholder Rights - Risk 3
We may not repurchase our common stock pursuant to our share repurchase program, and any repurchases may not enhance long-term stockholder value. Share repurchases could also increase the volatility of the price of our common stock and could diminish our cash reserves.The Company has an authorized share repurchase program. We are not obligated to repurchase shares of common stock under the repurchase program, and the repurchase program may be suspended or terminated at any time. The amount, timing, and execution of repurchases under this repurchase program may fluctuate, and any repurchases by us of our shares of common stock may further reduce cash available for operations and future growth, as well as debt repayment. Our ability to repurchase stock will depend on our ability to generate sufficient cash flows from operations, as supplemented our capacity to borrow funds, which may be subject to economic, financial, competitive and other factors that are beyond our control. Further, our credit facility limits our ability to repurchase shares according to certain conditions set forth by the lenders. Making share repurchases, or alternatively limiting or halting share repurchases under our share repurchase program may negatively impact investor perception of us and may therefore affect the market price and volatility of our stock.
Debt & Financing3 | 8.1%
Debt & Financing - Risk 1
Our ability to extend or refinance maturing indebtedness is uncertain and could materially affect our liquidity, financial condition, and operations.Debt & Financing - Risk 2
If we are unable to service our debt or comply with the financial and other covenants in our credit facility, our financial condition could be negatively affected.A substantial portion of our cash flows are dedicated to debt service payments. Our business may not continue to generate cash flow from operations in the future that is sufficient to meet our debt service, working capital and capital expenditure needs. Additionally, our current credit facility contains financial and other restrictive covenants, including among others, a total net leverage ratio covenant. A breach of these covenants could result in default, and if such default is not cured or waived, our lenders could accelerate our debt and declare it immediately due and payable. If this occurs, we may not be able to repay or borrow sufficient funds to refinance the debt. We routinely seek to refinance and/or extend the maturity of our indebtedness. Financing may not be available to us due to factors beyond our control, and even if financing is available, it may not be on acceptable terms. A default under our credit facility could cause a material adverse effect on our financial condition, including our liquidity and cash flows.
Debt & Financing - Risk 3
Decreased cash flow from operations, or an inability to access capital or successfully execute our potential real property sales could negatively affect our business initiatives or may result in our inability to execute our revenue, expense, and capital deployment strategies.Our ability to fund our operating plans and to implement our capital deployment strategies depends on sufficient cash flow from operations or other financing, including using funding under our revolving credit facility and from potential real property sales. We may also seek access to the debt or equity capital markets. Any additional capital raised through the sale of equity may dilute our stockholders' ownership percentages and could also result in a decrease in the market value of our securities.
Our capital deployment strategies include but are not limited to, improving existing restaurants and infrastructure, investing in new technology, paying down debt, investing in marketing to grow traffic, and executing on our long-term transformation strategy. If we experience decreased cash flow from operations, or an inability to access new capital on acceptable terms with acceptable interest rates if needed, our ability to fund our operations and planned initiatives, and to take advantage of growth opportunities, may be delayed or negatively affected. In addition, these disruptions and any resulting negative effect on our net income, cash flows, or other relevant financial performance metrics under our revolving credit facility could affect our ability to borrow or comply with our covenants under that facility.
Corporate Activity and Growth5 | 13.5%
Corporate Activity and Growth - Risk 1
Our business strategy may not be successful or achieve the desired results, which may have an adverse impact on our business, financial condition, and results of operations.Corporate Activity and Growth - Risk 2
Our tactical refranchising initiatives, including our pending refranchising transactions, may not be completed on favorable terms or completed at all and may not result in the anticipated financial benefits.Changed
As part of our First Choice plan, we are pursuing tactical refranchising opportunities to optimize our overall financing structure and strengthen our balance sheet. During the second quarter of fiscal 2026, we entered into three asset purchase agreements to sell restaurant assets associated with 116 of our 375 Company-owned restaurants for aggregate consideration of approximately $96.0 million in cash. None of the transactions had closed as of July 12, 2026, and each is subject to separate closing conditions, including required landlord consents, liquor license transfers, any required lender consent, and each purchaser obtaining financing. See Note 3. Significant Transactions. Tactical refranchising initiatives require significant management time and resources and may divert attention from day-to-day operations and other strategic priorities. The timing, pricing, and structure of any tactical refranchising transactions depend on market conditions.
There are a number of risks associated with these transactions, including the difficulty of predicting the ultimate costs and net proceeds of the sales, employee termination costs, the retention of restaurant team members through the transition to franchisee management, the results of negotiations with landlords, the effect of the sales on our ongoing operations, the tax consequences of the sales, and the future effect on our revenues, operating income, cash flows, and depreciation. If a transaction is delayed or terminated, we would continue to operate the affected restaurants and bear the related costs and lease obligations, and assets classified as held for sale would be reclassified. We may also remain primarily or secondarily liable on restaurant leases assigned or subleased to the purchasers, including where a purchaser is unable to obtain a full release from the landlord, and the amount of any liabilities to be recognized for those continuing obligations has not yet been determined.
Substantially all of our revenues are currently derived from sales at Company-owned restaurants. Any such transactions are expected to result in a shift from Company-owned restaurant revenues to franchise royalty income and advertising fund contributions, and we expect our total revenues to decrease as a result. Because the royalty and advertising fund contributions we will receive will represent a percentage of franchisee sales rather than the restaurant-level operating profit those restaurants previously generated, and because a substantial portion of our general and administrative expenses may not decline in proportion to the reduction in the number of restaurants we operate, the effect of the transactions on our operating income may be greater than their effect on our revenues. If our tactical refranchising initiatives are unsuccessful or do not achieve intended objectives, including improvements in liquidity and reductions in general and administrative expenses and long term debt, our business, financial condition, and results of operations could be materially adversely affected.
Corporate Activity and Growth - Risk 3
We may expand our restaurant base as a component of our long-term growth, and our ability to open and profitably operate new restaurants is subject to factors beyond our control.Our resources are currently allocated to increasing performance in our existing base of restaurants, but we may expand our restaurant base as a component of our long-term growth. The expansion of our restaurant base depends upon numerous factors, some of which are out of our control, including the cost and availability of capital, the ability to attract qualified operating team members to staff new restaurants, the ability to secure available and suitable restaurant sites on favorable lease and construction terms, timely adherence to development schedules, and competition that may affect consumer spending. New or less mature restaurants, once opened, may vary in profitability and levels of operating revenue for six months or more, and there are no assurance new restaurants will attain operating results similar to those of existing restaurants. Delays or failures in opening new restaurants, or the inability to profitably operate them once opened, could materially and adversely affect our planned growth.
Corporate Activity and Growth - Risk 4
We are subject to the risks presented by acquisitions or dispositions of restaurants.In the past, we have acquired franchised restaurants and disposed of restaurants. In the future, we may, from time to time, consider opportunistic acquisitions or dispositions of restaurants beyond the tactical refranchising initiatives described above. Any future acquisitions or dispositions will be accompanied by the risks commonly encountered in such transactions, including difficulty integrating operations and team members, potential disruption to our ongoing business, potential distraction of management, impact on the Company's financial condition, and the impairment of relationships with team members and guests as a result in changes in ownership and management.
Corporate Activity and Growth - Risk 5
We rely on our management team for the development and execution of our business strategy and the loss of a member of our management team could negatively affect our operating results.Our success depends in part on the contributions of our management team and other key personnel to develop and execute our business strategy. We recently experienced a transition in leadership, and the effects of this transition, or any future leadership changes, could disrupt our business and adversely affect our performance. Leadership transitions, even when planned, involve inherent risks, including potential disruptions to strategic continuity, loss of institutional knowledge, changes in management priorities, and challenges associated with integrating new leaders into the organization. The process of recruiting leadership is time-consuming and competitive and may divert management's attention, and there can be no assurance we will be successful in identifying and retaining qualified candidates on acceptable terms or within desired timeframes. Additional turnover on our management team or the failure to implement an appropriate succession plan could disrupt our business and prevent us from achieving our business strategy and initiatives, which could adversely affect our operating results.
Production
Total Risks: 10/37 (27%)Above Sector Average
Manufacturing1 | 2.7%
Manufacturing - Risk 1
Food safety and food-borne illness concerns, and any related unfavorable publicity could have an adverse effect on our business.Employment / Personnel3 | 8.1%
Employment / Personnel - Risk 1
Our business could be adversely affected by increased labor costs, including costs related to the increase in minimum wage and new health care laws.Employment / Personnel - Risk 2
Labor organizing could adversely affect our operations and harm our competitive position in the restaurant industry, which could harm our financial performance.Our employees or others may attempt to unionize our workforce, establish boycotts or picket lines or interrupt our supply chains which could increase our labor costs, limit our ability to manage our workforce effectively, and cause disruptions to our operations. A loss of our ability to effectively manage our workforce and the compensation and benefits we offer to our staff members could harm our financial performance.
Employment / Personnel - Risk 3
If we are unable to successfully attract, retain, and motivate qualified restaurant management and operations team members in a competitive market, we may be unable to effectively operate and grow our business and revenues, which could materially adversely affect our financial performance.Our ability to attract, retain, and motivate qualified management and operations team members is central to providing the desired guest and team member experience in our restaurants and delivering on our business strategy. The market for qualified talent continues to be competitive, which could increase our labor costs if we need to take additional measures to provide competitive wages, benefits, and workplace conditions. Changes in immigration laws and regulations could decrease the pool of candidates with legal work authorizations, causing disruption in the workforce for all companies that rely on hourly workers. If we are unable to recruit, retain and motivate qualified people, our restaurants could be short staffed, we may be forced to incur overtime expenses, hourly team member turnover could increase, and our ability to operate our restaurants effectively could be limited, and the guest experience could be negatively affected, leading to a decline in traffic and sales, which could materially adversely affect our financial performance. Further, an inability to adequately monitor and proactively respond to any potential team member dissatisfaction could lead to poor guest satisfaction, higher turnover, litigation and unionization, which could impact our ability to effectively operate and grow our business and revenues.
Supply Chain1 | 2.7%
Supply Chain - Risk 1
We may experience interruptions in the delivery of food and other products from third parties.Costs5 | 13.5%
Costs - Risk 1
Price increases may negatively affect guest visits.Costs - Risk 2
We are subject to all of the risks associated with leasing space subject to long-term non-cancelable leases, and risks related to renewal.As of December 28, 2025, 381 of our 385 Company-owned restaurants are located on leased premises. We have in the past, and may in the future, engage in sale-leaseback transactions, which could further increase the number of our leased properties. Payments under our operating leases account for a significant portion of our operating expenses. We cannot be certain that we will maintain a level of cash flow from operating activities sufficient for us to pay our operating lease expenses. Additional sites that we lease are likely to be subject to similar long-term non-cancelable leases. We have in the past and may in the future close restaurants, including as we continue to evaluate certain underperforming restaurants. In connection with closing restaurants, we may nonetheless be committed to performing our obligations under the applicable lease including, among other things, paying the base rent for the balance of the lease term, incurring termination fees, and other significant one-time cash expenditures. Additionally, closing restaurants has in the past and may in the future result in other significant non-cash charges, including impairments. The Company has a potential contingent lease liability for lease payments related to certain franchisees' lease arrangements. This potential contingent lease liability could increase if the Company sells restaurants to franchisees, as we may be required to remain responsible for lease payments for certain restaurants to the extent the purchasing franchisee defaults on the lease. Upon such default, we may be required to make lease payments and seek recourse against the franchisee or agree to repayment terms.
In addition, as our leases expire, there can be no assurance we will be able to renew our expiring leases after the expiration of renewal options, either on commercially acceptable terms or at all. As a result, we may incur additional costs to operate our restaurants, including increased rent and other costs related to the negotiation of terms of occupancy of an existing leased premise. If we are unable to renew a lease or determine not to renew a lease, there may be costs related to the relocation and development of a replacement restaurant or, if we are unable to relocate, reduced revenue.
Costs - Risk 3
Our operations are susceptible to the changes in cost and availability of commodities which could negatively affect our results of operations.Our profitability depends in part on our ability to anticipate and react to changes in commodity costs. Various factors beyond our control, including adverse weather conditions, governmental regulation and monetary policy, new or increased trade barriers and import tariffs (including retaliatory trade actions), product availability, recalls of food products, and seasonality, as well as the effects of the current macroeconomic environment on our suppliers, may affect our commodity costs or cause a disruption in our supply chain. We seek to mitigate commodity price risk through a combination of purchasing strategies, including fixed-price contracts for certain food and beverage items. However, these arrangements may not fully offset future cost increases and typically cover only a portion of our total commodity needs for limited time periods. As contracts expire, we may be unable to renew them on favorable terms, which could result in higher costs, changes in supplier relationships, or the need to source products from alternative suppliers. In addition, we may not be able to fully pass increased commodity costs on to guests through menu pricing or other actions without adversely affecting guest traffic. If we are unable to effectively manage commodity cost increases or supply disruptions, our results of operations and profitability could be adversely affected.
Costs - Risk 4
The ongoing need for maintenance and improvements at our existing restaurants requires us to spend significant capital and we may not achieve a return on investment.Many of our existing restaurants are mature and require capital expenditures for maintenance and improvement to remain competitive and maintain our brand standard. Under our First Choice plan, we have begun, and plan to continue, investing in our restaurants by addressing critical deferred maintenance needs, such as flooring updates, internal finishings, furniture repairs, and exterior improvements that directly impact guest perceptions and experience, as well as in new technology. Additionally, we have evaluated and may undertake in the future a more substantial restaurant renovation program. These initiatives involve significant capital expenditures. If we do not make these capital investments or do not achieve a return on the investment, our business, financial condition, and our ability to compete effectively could be harmed.
Costs - Risk 5
Our current insurance may not provide adequate levels of coverage against claims.There are types of losses we may incur that cannot be insured against or that we believe are not economically reasonable to insure against. Such losses could have a material adverse effect on our business and results of operations. In addition, we self-insure a significant portion of expected losses under our employee health, workers' compensation, general liability, property, and cyber insurance programs. Unanticipated changes in the actuarial assumptions and management estimates underlying our reserves for these losses could result in materially different amounts of expense under these programs, which could have a material adverse effect on our financial condition, results of operations, and liquidity. Failure to obtain and maintain adequate directors' and officers' insurance could materially adversely affect our ability to attract and retain qualified officers and directors.
Ability to Sell
Total Risks: 5/37 (14%)Below Sector Average
Competition1 | 2.7%
Competition - Risk 1
Our success depends on our ability to effectively compete in the restaurant industry to attract and retain guests.Demand2 | 5.4%
Demand - Risk 1
Changes in consumer preferences could negatively affect our results of operations.Demand - Risk 2
Changes in consumer buying patterns, particularly due to declines in traffic near our leased locations, and increases in online sales, may affect our financial condition and results of operations.The success of our restaurants depends in large part on the performance of our leased locations, which are generally situated in high-traffic retail and entertainment areas such as malls, lifestyle centers, and shopping centers. Our restaurants rely on customer traffic generated by these surrounding locations. Changes in demographic, economic, or consumer behavior patterns, including reduced foot traffic or business closures in these areas, may make certain locations less attractive or profitable. In addition, the continued growth of online shopping has negatively affected traffic at many traditional "brick and mortar" retail centers, which could reduce guest visits to our restaurants. Our ability to relocate underperforming restaurants may also be limited by the availability and cost of suitable alternative sites and by our inability to easily terminate our long-term lease commitments.
We have invested in off-premises sales, including delivery, pickup options, and catering, to attract guests who are looking for convenience or want to enjoy our food off-premises. While we plan to continue to invest in the growth of our off-premises sales, there can be no guarantee we will maintain or increase such sales. Off-premises sales could also cannibalize dine-in sales, or our systems and procedures may require additional investments in technology or people. A significant portion of our delivery orders are fulfilled through third-party delivery providers, which charge commissions and over whom we have limited control. Delivery drivers may make errors, fail to make timely deliveries, damage our food or poorly represent our brand, which may lead to guest disappointment, reputational harm or unmet sales expectations. While we have introduced an alternative to third party delivery by offering an online Company platform to collect orders and outsource the "last mile" of delivery, we may not be able to convert guests to our platform and that model remains subject to some of the same risks.
Sales & Marketing1 | 2.7%
Sales & Marketing - Risk 1
Our marketing and branding strategies to attract, engage, and retain our guests, including recent and future changes to our loyalty program, may not be successful, which could negatively affect our business.Brand / Reputation1 | 2.7%
Brand / Reputation - Risk 1
Damage to our brand image or reputation, including due to unfavorable social and digital media, could adversely impact our business.Tech & Innovation
Total Risks: 4/37 (11%)Below Sector Average
Trade Secrets1 | 2.7%
Trade Secrets - Risk 1
Our future success depends on our ability to protect our intellectual property.Cyber Security1 | 2.7%
Cyber Security - Risk 1
A privacy or security breach involving our information technology systems, or the failure of our data security measures could interrupt our business, damage our reputation, and negatively affect our operations and financial condition.Technology2 | 5.4%
Technology - Risk 1
If there is a material failure in our information technology systems, our business could be negatively affected, and our systems may be inadequate to support our future growth strategies.Technology - Risk 2
New or improved technologies or changes in consumer behavior facilitated by these technologies could negatively affect our business.Consumer behavior continues to evolve regarding restaurant technology expectations, and we may not be able to meet those changing demands. Our competitors, some with greater resources, may capitalize on emerging technologies or shifts in consumer preferences, potentially weakening our competitive position. Certain technology initiatives require significant capital investment, including addressing aging hardware and software infrastructure and components nearing end-of-life, necessitating careful evaluation against other business priorities. Aging hardware and outdated systems, as well as the process to upgrade or replace hardware and systems, increases the risk of system failures, business disruptions, and degraded guest experiences.
Legal & Regulatory
Total Risks: 4/37 (11%)Below Sector Average
Regulation1 | 2.7%
Regulation - Risk 1
Our failure to remain in compliance with governmental laws and regulations as they continually evolve, and the associated costs of compliance, could cause our business results to suffer.Litigation & Legal Liabilities2 | 5.4%
Litigation & Legal Liabilities - Risk 1
A significant increase in litigation could have a material adverse effect on our business, financial condition, and results of operations.Litigation & Legal Liabilities - Risk 2
Our franchisees could take actions that could harm our business, expose us to liability, or damage our reputation.Changed
Franchisees are independent entities and are not our employees, partners, or affiliates. If our pending refranchising transactions are completed, our franchised restaurant base will increase from 90 to 206 restaurants and we will rely more on franchisees to operate restaurants in compliance with our brand standards, operating procedures, and applicable law. If our franchisees are not successful, then our business, results of operations, and reputation could be disproportionately adversely affected by the relative scale of such franchise operations. We share with our franchisees what we believe to be best practices in the restaurant industry; however, franchisees operate their restaurants as independent businesses. Consequently, the quality of franchised restaurant operations may be diminished by any number of factors beyond our control. Moreover, franchisees may not successfully operate restaurants in a manner consistent with our standards and requirements or may not hire and train qualified managers and other restaurant team members. In addition, as independent businesses, franchisees may not be required to comply with the same levels of business or regulatory compliance we are. While we try to ensure the quality of our brand and compliance with our operating standards, and the confidentiality thereof, are maintained by all of our franchisees, we cannot provide assurance our franchisees will avoid actions that negatively affect the reputation of Red Robin or the value of our proprietary information. Our image and reputation and the image and reputation of other franchisees may suffer materially, and system-wide sales could significantly decline if our franchisees do not operate restaurants according to our standards.
Following the refranchising transactions we will receive a greater portion of our revenues in the form of royalties and advertising fund contributions based on a percentage of sales at franchised restaurants, and a majority of our franchised restaurants would be operated by a small number of franchisees, several of which would each operate a significant number of our franchised restaurants. Accordingly, our financial results will to a greater extent depend upon the operational and financial success of our franchisees. If a significant franchisee, or a number of our franchisees in the aggregate, becomes financially distressed, our royalty and other revenues may decline, our receivables from franchisees and the related allowance for credit losses may increase, and advertising fund contributions supporting the Red Robin brand may be reduced. Our ability to enforce our rights under the franchise agreements may also be limited in the event of a franchisee bankruptcy or insolvency proceeding.
We are subject to federal and state laws that regulate the offer and sale of franchises and aspects of the licensor-licensee relationship. Further, there have been historical actions before the National Labor Relations Board ("NLRB") where it was alleged that a parent company could be held liable for the actions of its franchisees, including potentially jointly liable for labor and wage violations by its franchisees. Failure to comply with the laws and regulations governing our franchisee relationships or adverse decisions similar to the above-described NLRB actions could subject us to liability for actions of the franchisees, or expose us to liability to franchisees, or fines and penalties for non-compliance.
Taxation & Government Incentives1 | 2.7%
Taxation & Government Incentives - Risk 1
Changes in tax laws and unanticipated tax liabilities could adversely affect our financial results.Macro & Political
Total Risks: 3/37 (8%)Below Sector Average
Economy & Political Environment2 | 5.4%
Economy & Political Environment - Risk 1
The global and domestic economic and geopolitical environment may negatively affect frequency of guest visits and average ticket spend at our restaurants, which would negatively affect our revenues and our results of operations.Economy & Political Environment - Risk 2
The large number of Company-owned restaurants concentrated in the Western United States makes us susceptible to changes in economic and other trends in that region.As of December 28, 2025, a total of 162 or 42% of our 385 Company-owned restaurants, representing 50% of restaurant revenues, were located in the Western United States (i.e., Arizona, California, Colorado, Idaho, Nevada, New Mexico, Oregon, Utah, and Washington). As a result of our geographic concentration, negative publicity regarding any of our restaurants in the Western United States, as well as regional differences in the legal, regulatory, and litigation environment, could have a material adverse effect on our business and operations, as could other regional occurrences such as local strikes, regional cost-of-living increases, energy shortages, or increases in energy prices, droughts, earthquakes, fires, or other natural disasters.
Natural and Human Disruptions1 | 2.7%
Natural and Human Disruptions - Risk 1
Our results of operations may fluctuate significantly due to various risks and unexpected circumstances, including adverse weather conditions, natural disasters, climate change, pandemics, catastrophic events, and other factors outside our control that could increase costs, disrupt our supply change, and impact seasonality, among other things.See a full breakdown of risk according to category and subcategory. The list starts with the category with the most risk. Click on subcategories to read relevant extracts from the most recent report.
FAQ
What are “Risk Factors”?
Risk factors are any situations or occurrences that could make investing in a company risky.
The Securities and Exchange Commission (SEC) requires that publicly traded companies disclose their most significant risk factors. This is so that potential investors can consider any risks before they make an investment.
They also offer companies protection, as a company can use risk factors as liability protection. This could happen if a company underperforms and investors take legal action as a result.
It is worth noting that smaller companies, that is those with a public float of under $75 million on the last business day, do not have to include risk factors in their 10-K and 10-Q forms, although some may choose to do so.
How do companies disclose their risk factors?
Publicly traded companies initially disclose their risk factors to the SEC through their S-1 filings as part of the IPO process.
Additionally, companies must provide a complete list of risk factors in their Annual Reports (Form 10-K) or (Form 20-F) for “foreign private issuers”.
Quarterly Reports also include a section on risk factors (Form 10-Q) where companies are only required to update any changes since the previous report.
According to the SEC, risk factors should be reported concisely, logically and in “plain English” so investors can understand them.
How can I use TipRanks risk factors in my stock research?
Use the Risk Factors tab to get data about the risk factors of any company in which you are considering investing.
You can easily see the most significant risks a company is facing. Additionally, you can find out which risk factors a company has added, removed or adjusted since its previous disclosure. You can also see how a company’s risk factors compare to others in its sector.
Without reading company reports or participating in conference calls, you would most likely not have access to this sort of information, which is usually not included in press releases or other public announcements.
A simplified analysis of risk factors is unique to TipRanks.
What are all the risk factor categories?
TipRanks has identified 6 major categories of risk factors and a number of subcategories for each. You can see how these categories are broken down in the list below.
1. Financial & Corporate
- Accounting & Financial Operations - risks related to accounting loss, value of intangible assets, financial statements, value of intangible assets, financial reporting, estimates, guidance, company profitability, dividends, fluctuating results.
- Share Price & Shareholder Rights – risks related to things that impact share prices and the rights of shareholders, including analyst ratings, major shareholder activity, trade volatility, liquidity of shares, anti-takeover provisions, international listing, dual listing.
- Debt & Financing – risks related to debt, funding, financing and interest rates, financial investments.
- Corporate Activity and Growth – risks related to restructuring, M&As, joint ventures, execution of corporate strategy, strategic alliances.
2. Legal & Regulatory
- Litigation and Legal Liabilities – risks related to litigation/ lawsuits against the company.
- Regulation – risks related to compliance, GDPR, and new legislation.
- Environmental / Social – risks related to environmental regulation and to data privacy.
- Taxation & Government Incentives – risks related to taxation and changes in government incentives.
3. Production
- Costs – risks related to costs of production including commodity prices, future contracts, inventory.
- Supply Chain – risks related to the company’s suppliers.
- Manufacturing – risks related to the company’s manufacturing process including product quality and product recalls.
- Human Capital – risks related to recruitment, training and retention of key employees, employee relationships & unions labor disputes, pension, and post retirement benefits, medical, health and welfare benefits, employee misconduct, employee litigation.
4. Technology & Innovation
- Innovation / R&D – risks related to innovation and new product development.
- Technology – risks related to the company’s reliance on technology.
- Cyber Security – risks related to securing the company’s digital assets and from cyber attacks.
- Trade Secrets & Patents – risks related to the company’s ability to protect its intellectual property and to infringement claims against the company as well as piracy and unlicensed copying.
5. Ability to Sell
- Demand – risks related to the demand of the company’s goods and services including seasonality, reliance on key customers.
- Competition – risks related to the company’s competition including substitutes.
- Sales & Marketing – risks related to sales, marketing, and distribution channels, pricing, and market penetration.
- Brand & Reputation – risks related to the company’s brand and reputation.
6. Macro & Political
- Economy & Political Environment – risks related to changes in economic and political conditions.
- Natural and Human Disruptions – risks related to catastrophes, floods, storms, terror, earthquakes, coronavirus pandemic/COVID-19.
- International Operations – risks related to the global nature of the company.
- Capital Markets – risks related to exchange rates and trade, cryptocurrency.