Company: CAVA
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-007882
Chunk: 24

Company: CAVA GROUP, INC.
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 24
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 our leases, the applicable landlords could draw under the letters of credit and/or seize the security deposit, which could adversely affect our financial condition and liquidity.

Operating lease costs account for a significant portion of our operating expenses, and represented 7.1%, 8.2%, and 9.8% of our revenue in fiscal 2024, 2023, and 2022, respectively. These substantial operating lease obligations could have negative consequences to our financial condition and results of operations, including requiring a substantial portion of our available cash to be applied to pay our rental obligations, thus reducing cash available for other purposes, as well as limiting our flexibility in planning for, and reacting to, changes in our business or our industry.

We may not be able to successfully expand our digital and delivery business, which is subject to risks outside of our control.

For fiscal 2024, 2023, and 2022, CAVA Digital Revenue Mix was 36.4%, 36.0%, and 34.5%, respectively. The expansion of our digital and delivery business is important to the growth of our business. Our ability to expand our digital business will depend in part on our ability to improve and evolve our technology, including our website, the CAVA app, and use of third-party delivery marketplaces to remain competitive within the industry. The CAVA app and online ordering system could be interrupted by technological failures or user errors, or be subject to cyber-attacks, which could adversely impact our sales and brand image.

18

Substantially all of our delivery orders, including native delivery orders, are fulfilled through our third-party delivery partners. If a third-party delivery service we utilize (particularly for our native delivery orders) fails to deliver food orders to our guests in a timely manner or provides unsatisfactory delivery service, our guests may attribute the bad experience to us and may choose to stop ordering from us. If a third-party delivery service we utilize ceases or curtails operations, experiences damage to its brand image, increases its fees, or gives greater priority or promotions on its platforms to our competitors, our delivery business and our sales may be negatively impacted. Furthermore, the third-party food delivery service industry has been consolidating and may continue to consolidate, which may give third-party delivery companies more leverage in negotiating the terms and pricing of contracts, which in turn could negatively affect our profitability. 

In addition, from time to time, our employees make deliveries to guests who have placed catering and delivery orders. As a result, we may