Texas Roadhouse

Cheap for a reason is the question the numbers cannot answer.

Whether the price already reflects the risks is what the deep dive is for.

• If we fail to protect the reputation of our brands, our guest traffic, sales, and overall financial performance could be materially adversely affected.

  Could happen

  Reputational harm could arise from a wide range of factors, including concerns about food quality or safety; food-borne illness claims; tampering or contamination incidents; poor health inspection results; supply chain or processing issues involving us or our vendors; facility conditions; guest complaints; alcohol related incidents; litigation; security breaches or technology failures; employee and/or labor relations concerns, including, but not limited to, allegations of harassment, discrimination, retaliation, or other misconduct; alleged violations of laws, regulations, or industry standards; and politically motivated accusations or other negative publicity. The actions of third parties, including our suppliers, franchisees, and our licensees in retail initiatives, also presents reputational risk outside of our direct control. Moreover, the rapid and broad dissemination of information through social media and other digital channels can amplify adverse events, sometimes without regard to accuracy or context, making it more difficult to mitigate or remediate negative impressions quickly or effectively.

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• Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand.

  Could happen

  Our brand value also depends on protection of trade secrets (including recipes, supplier relationships, and operational know-how), copyrights (including app, website, and marketing content), domain names, software, and, where applicable, rights of publicity. Protecting these assets can be difficult, particularly in jurisdictions with limited enforcement. Use of open-source software, third-party content, and artificial intelligence ("AI") in our technology and marketing may impose license obligations or usage restrictions and may increase the risk of third-party IP claims or content moderation obligations. Our inability to register or protect our marks and other proprietary rights in foreign jurisdictions could adversely affect our competitive position in international markets.

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• Our expansion into international markets presents increased economic, political, regulatory, and other risks.

  Could happen

  We are also subject to governmental regulations throughout the world which includes complying with local laws, regulations, and customs in foreign jurisdictions; regulatory requirements or tariffs on goods needed to construct and/or operate our restaurants; compliance with U.S. laws such as the Foreign Corrupt Practices Act, and similar laws in foreign jurisdictions; differences in the registration and/or enforceability of intellectual property and contract rights; adverse tax consequences, profit repatriation, and other restrictions on the transfer of funds; and different and more stringent user protection, data protection, privacy, and other laws. Our failure to manage any of these risks successfully could harm our existing or future international operations and our overall business and results of our operations.

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• Corporate responsibility matters could adversely affect our brand, business, results of operations, and financial condition.

  Could happen

  In addition, some individuals, shareholder activists, government officials, and regulators have expressed opposing views and actions with respect to ESG matters which includes the proposal or enactment of "Anti-ESG" policies and initiatives. Strong opinions continue to be publicly expressed both for and against diversity and inclusion and ESG initiatives and positions taken by many corporations, including our Company, are tracked, monitored, and subject to heightened scrutiny from consumers, investors, advocacy groups, and public figures, potentially leading to consumer boycotts, negative publicity campaigns, litigation, and reputational harm. Negative reputational incidents or perceptions about the Company could adversely impact our business and results of operations by reducing sales, damaging business relationships, and negatively impacting employee retention and recruiting efforts.

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• You 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.

  You should not rely on past changes in our average unit volume or comparable restaurant sales as an indication of our future results of operations, as these metrics may fluctuate significantly over time. A wide range of factors, both within and beyond our control, have historically influenced, and will likely continue to influence, average unit volume and comparable restaurant sales. These factors include, among others, the level of consumer awareness and perception of our restaurant concepts with respect to quality, price, value, and service; the effectiveness of our business strategy; our ability to sustain higher levels of to-go sales and differentiate our concepts within off-premise channels; and the impact of competition both from other restaurants (including fast-casual and quick-service establishments) and alternative food service providers, such as delivery services, meal kits, and grocery stores. Additional factors that can affect our performance include our ability to implement menu price increases without negatively impacting guest traffic or average check size; general economic conditions, adverse weather patterns and natural disasters; seasonal consumer trends; the introduction of new menu items and changes in pricing; a loss of parking or access rights resulting from government action or private transactions; and negative publicity related to food safety, health concerns, service quality, or the integrity of our suppliers’ food processing.

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