Company: RRGB
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001171759-25-000012
Chunk: 31

Company: RED ROBIN GOURMET BURGERS INC
Filing Date: 2025-02-26
Form: 10-K
Item: Item 1A
Chunk 31
---
 capital investments or do not achieve a return on the investment, our business, profitability, and our ability to compete effectively could be harmed. 

We are subject to the risks presented by acquisitions or refranchising.

As part of our expansion efforts, we have acquired some of our franchised restaurants in the past. In the future, we may, from time to time, consider opportunistic acquisitions or dispositions of restaurants. We may in the future pursue refranchising with quality operators in certain identified markets. Any future acquisitions or dispositions will be accompanied by the risks commonly encountered in acquisitions. These risks include among other things:

•the difficulty of integrating operations and Team Members;

•the potential disruption to our ongoing business;

•the potential distraction of management;

•the effect on selling, general, and administrative expenses and earnings;

•the inability to maintain uniform standards, controls, procedures, and policies; and

•the impairment of relationships with Team Members and Guests as a result of changes in ownership and management.

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 29, 2024, a total of 166 or 41% of our 407 Company-owned restaurants, representing 51% of restaurant revenues, were located in the Western United States (i.e., Arizona, California, Colorado, Nevada, Oregon, Idaho, New Mexico, Utah, and Washington state). 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. 

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.

15

Table of Contents

We implemented changes to our management team to support the Company’s new “North Star” five-point plan. Our management team is central to our success and difficult to replace. We may be unable to retain our management team or attract new highly qualified members, particularly if we do not offer competitive employment terms. 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,