Risk Factors Update Summary

• Launching new products and broadening distribution channels could escalate food safety risks.
• The importance of adhering to regulations is emphasized, as non-compliance could result in loss of potential franchise revenues.
• Disruption in production of mixes and concentrates could cascade through the global supply chain.
• Expansion of omni-channel business model will entail significant costs and uncertainties.
• Concentrated ownership by JAB may hinder actions favored by other shareholders, potentially delaying decisions.
• Risks associated with international operations include regulatory uncertainties and challenges in supply chain logistics.
• Ongoing expansion of manufacturing capabilities and logistics systems will require substantial adjustments.
• The company's effective income tax rate could be adversely affected by potential changes in tax laws.
• Failure to maintain adequate food safety measures could lead to disruptions and reduced profit margins.
• Anticipated federal legislation may lead to increased costs for the organization and domestic franchisees.
• JAB's influence could discourage attempts at a change in control, impacting shareholder premiums.
• Reliance on a single vendor for essential ingredients exposes the business to supply interruptions.
• JAB's ability to sell shares may significantly reduce the market price of common stock.
• Several states have already raised minimum wage rates, potentially resulting in higher labor expenses.
• The company's ability to utilize deferred tax assets depends on generating future taxable income within respective jurisdictions.
• Success of international expansion depends on identifying suitable partners and extending market reach.
• Reliance on exporting products may be impacted by regulatory constraints and currency fluctuations.
• Increased reliance on third-party delivery services heightens the risk of food safety issues.
• The company's significant indebtedness may limit flexibility, increase interest expenses, and constrain operations.
• Changes in minimum wage rates could lead to higher labor expenses, influenced by inflationary pressures and labor market shortages.
• Safeguarding intellectual property rights is crucial, as challenges like potential infringements could impact the company's competitive position.
• Failure to adapt to evolving consumer preferences and regulatory changes could negatively impact operations.
• A credit rating downgrade could increase borrowing costs, limit financial institution participation, and reduce business flexibility.
• Cybersecurity risks, including system disruptions and data breaches, pose financial and operational threats.
• Strategic transactions may lead to challenges like integration costs, diversion of management focus, and revenue risks.
• Global expansion risks include external factors impacting shop development and hindering growth objectives.