1367722--3/21/2008--SPICY_PICKLE_FRANCHISING

related topics

{stock, price, share}

{acquisition, growth, future}

{financial, litigation, operation}

{stock, price, operating}

{cost, operation, labor}

{competitive, industry, competition}

{control, financial, internal}

{interest, director, officer}

{cost, regulation, environmental}

{operation, natural, condition}

{regulation, government, change}

{personnel, key, retain}

{regulation, change, law}

RISKS RELATING TO OUR BUSINESS We have historically incurred losses and may continue to incur losses in the future, which may impact our ability to implement our business strategy and adversely affect our financial condition. Our operating results are closely tied to the success of our franchisees. Food safety and food-borne illness concerns may have an adverse effect on our business. Changes in commodity and other operating costs or supply chain and business disruptions could adversely affect our results of operations. We could be party to litigation that could adversely affect us by increasing our expenses or subjecting us to material money damages and other remedies. Compliance with governmental regulations may adversely affect our business operations. We may not attain our target development goals. The fast casual segment of the restaurant industry is highly competitive. We may not persuade customers of the benefits of paying our prices for higher-quality food. Health concerns arising from outbreaks of Avian flu may have an adverse effect on our business. We are dependent on key personnel, the loss of whom could significantly harm our business, results of operations and financial condition. We are a high-risk early stage company. We may need additional financing to support business growth, and this capital might not be available on acceptable terms, or at all, which could adversely affect our financial condition. Our operating results may fluctuate in future periods and, as a result, we may fail to meet investor expectations, which could cause the price of our common stock to decline. We could have difficulty in the management of potential growth, which could adversely affect our business, results of operations and financial condition. We may not be able to successfully integrate and oversee the growth of new franchises, which could adversely affect our business, results of operations and financial condition. We will incur increased costs as a result of being a public company and this may adversely affect our operating results. New rules, including those contained in and issued under the Sarbanes-Oxley Act of 2002, may make it difficult for us to retain or attract qualified officers and directors, which could adversely affect the management of our business and our ability to retain the trading status of our common stock on the OTCBB. If we fail to comply with federal and state statutes, regulations and rules governing our offer and sale of franchises and our relationship with our franchisees, we may be subject to franchisee-initiated litigation and governmental or judicial fines or sanctions. Our franchisees could take actions that could be harmful to our business RISKS RELATING TO OWNERSHIP OF OUR COMMON STOCK Our common stock price has been volatile, which could result in substantial losses for investors purchasing shares of our common stock. The conversion of our Series A Preferred Stock and the exercise of outstanding options and warrants to purchase our common stock could substantially dilute your investment, impede our ability to obtain additional financing, and cause us to incur additional expenses. The voting power and value of your investment could decline if our Series A Preferred Stock and warrants are converted or exercised at a reduced price due to our issuance of lower-priced shares that trigger rights of the holders of our Series A Preferred Stock and warrants to receive additional shares of our stock. We may continue to pay for consulting and professional services fees with our stock, and this would be dilutive to investors. Our executive officers and directors own a significant amount of our common stock, which probably will allow them to control the outcome of matters submitted to our shareholders for vote. We have not paid cash dividends to our common stockholders, and it is unlikely that we will pay cash dividends to our common stockholders in the foreseeable future. Our common stock is considered to be a penny stock as defined by Section 3(a)(51) and Rule 3a51-1 under the Securities Exchange Act of 1934, as amended (the Exchange Act ), and, therefore, is subject to penny stock regulations. These regulations could make it more difficult for you to sell shares you acquire.

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1367722--3/21/2008--SPICY_PICKLE_FRANCHISING_INC