1171014--3/29/2010--COSI

related topics

{acquisition, growth, future}

{competitive, industry, competition}

{financial, litigation, operation}

{cost, contract, operation}

{condition, economic, financial}

{operation, natural, condition}

{system, service, information}

{stock, price, operating}

{cost, regulation, environmental}

{stock, price, share}

{property, intellectual, protect}

{control, financial, internal}

{regulation, government, change}

{investment, property, distribution}

We must identify and obtain a sufficient number of suitable new restaurant sites for us to achieve a sustainable revenue growth rate. Our expansion in existing markets can cause sales in some of our existing restaurants to decline, which could result in restaurant closures. Our expansion into new markets, both foreign and domestic, may present increased risks due to our unfamiliarity with the area. The restaurants we open in new geographic regions may not achieve market acceptance. We may not be able to successfully incorporate a franchising and area developer model into our strategy. If our franchisees cannot develop or finance new restaurants, build them on suitable sites or open them on schedule, our growth and success may be impeded. Additional foodservice strategic alliances may not be successful and may materially adversely affect our business and results of operations. Any inability to manage our growth effectively could materially adversely affect our operating results. If we are unable to successfully integrate future acquisitions, our business could be negatively impacted. Any acquisitions may also be costly. Risks Related to Our Business If we are unable to execute our business strategy, we could be materially adversely affected. During our operating history, we have been unable to achieve profitability. If internally generated cash flow from our restaurants does not meet our expectations, our business, results of operations and financial condition could be materially adversely affected. We may need additional capital in the future and it may not be available on acceptable terms. The current economic recession could adversely affect our business and financial results and have a material adverse effect on our liquidity and capital resources. Seasonality, inclement weather and other variable factors may adversely affect our sales and results of operations and could cause our quarterly results to fluctuate and fall below expectations of securities analysts and investors, resulting in a decline in our stock price. Our franchisees could take actions that could harm our business. We could face liability from our franchisees. Our financial results are affected by the financial results of our franchisees. Our restaurants are currently concentrated in the Northeastern and Mid-Atlantic regions of the United States, particularly in the New York City and Washington, D.C. areas. Accordingly, we are highly vulnerable to negative occurrences in these regions. You should not rely on past increases in our average unit volumes as an indication of our future results of operations because they may fluctuate significantly. Our common stock may be delisted from the Nasdaq Global Market, which could have an adverse impact on the liquidity and market price of our common stock. If we fail to comply with governmental regulations or if these regulations change, our business could suffer. Our operations depend upon governmental licenses and we may face liability under dram shop statutes. Our failure or inability to enforce our trademarks or other proprietary rights could adversely affect our competitive position or the value of our brand. We hold significant amounts of illiquid assets and may have to dispose of them on unfavorable terms. We may face litigation that could have a material adverse effect on our business, financial condition and results of operations. If we are unable to protect our customers credit card data, we could be exposed to data loss, litigation and liability, and our reputation could be significantly harmed. We rely on computer systems and information technology to run our business. Any material failure, interruption or security breach of our computer systems or information technology may adversely affect the operation of the business and our results of operations. Risks Relating to the Food Service Industry Our business is affected by changes in consumer preferences. Natural disasters, war, acts of terrorism or other armed conflict, or the threat of such actions, on the United States or international economies may cause a decline in discretionary consumer spending, which would negatively affect our business. Our success depends on our ability to compete with many food service businesses. Changes in food and supply costs and availability could adversely affect our results of operations.

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1171014--3/29/2010--COSI_INC