1041379--3/14/2007--AFC_ENTERPRISES

related topics

{operation, natural, condition}

{customer, product, revenue}

{cost, regulation, environmental}

{cost, operation, labor}

{personnel, key, retain}

{financial, litigation, operation}

{property, intellectual, protect}

{debt, indebtedness, cash}

{stock, price, operating}

{operation, international, foreign}

{acquisition, growth, future}

{condition, economic, financial}

If the cost of chicken increases, our cost of sales will increase and our operating results could be adversely affected. Shortages or interruptions in the supply or delivery of fresh food products could adversely affect our operating results. Changes in consumer preferences and demographic trends, as well as concerns about health or food safety and quality, could result in a loss of customers and reduce our revenues. Instances of avian flu or food-borne illnesses could adversely affect the price and availability of poultry and other foods and create negative publicity which could result in a decline in our sales. The effect of Hurricane Katrina and any failure to properly address the issues caused by Hurricane Katrina could adversely affect our operating results. If any member of our senior management left us, our operating results could be adversely affected, and we may not be able to attract and retain additional qualified management personnel. Our 2005 Credit Facility may limit our ability to expand our business, and our ability to comply with the covenants, tests and restrictions contained in this agreement may be affected by events that are beyond our control. If our franchisees are unable or unwilling to open a sufficient number of restaurants, our growth strategy could be at risk. Currency, economic, political and other risks associated with our international operations could adversely affect our operating results. We have recently experienced a decline in the number of restaurants we have franchised in Korea. If we and our franchisees fail to purchase chicken at quantities specified in SMS s poultry contracts, we may have to purchase the commitment short-fall and this could adversely affect our operating results. Our quarterly results and same-store sales may fluctuate significantly and could fall below the expectations of securities analysts and investors, which could cause the market price of our common stock to decline. We are subject to government regulation, and our failure to comply with existing regulations or increased regulations could adversely affect our business and operating results. The SEC investigation arising in connection with the restatement of our financial statements could adversely affect our financial condition. We may not be able to adequately protect our intellectual property, which could harm the value of our Popeyes brand and branded products and adversely affect our business.

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1041379--3/14/2007--AFC_ENTERPRISES_INC