49754--2/28/2008--IHOP

related topics

{financial, litigation, operation}

{acquisition, growth, future}

{property, intellectual, protect}

{operation, international, foreign}

{cost, operation, labor}

{debt, indebtedness, cash}

{competitive, industry, competition}

{condition, economic, financial}

{customer, product, revenue}

{control, financial, internal}

{loan, real, estate}

{investment, property, distribution}

{regulation, government, change}

Risks Relating to our Restaurant Business Shortages or interruptions in the supply or delivery of food supplies or price increases could adversely affect our system-wide sales, revenues or profits. Changing health or dietary preferences may cause consumers to avoid Applebee's and IHOP's brand products in favor of alternative foods. Negative publicity in connection with unanticipated events may materially and adversely affect our business. The restaurant industry is highly competitive, and that competition could lower our revenues, margins and market share. We may have difficulty expanding into new geographic markets in the United States. We may have difficulty expanding in new markets outside the United States. Our business is subject to macroeconomic and other factors that may negatively impact our results of operations. A number of other factors, some of which are outside our control, may materially and adversely affect our business. Ownership of real property exposes us to potential liability. We and our franchisees are subject to a variety of litigation risks that may negatively impact performance. Employment of employees at certain Company-owned restaurants exposes us to potential liability. Our failure or the failure of our franchisees to comply with federal, state and local governmental regulations may subject us to losses and harm our brands. Harm to our brands may have a material adverse effect on our business. Restaurant development plans under development agreements may not be implemented effectively. Various factors affecting advertising may materially adversely affect our restaurant business. Concentration of Applebee's franchised restaurants in a limited number of franchisees subjects us to greater credit risk. Termination or non-renewal of franchise agreements may disrupt restaurant performance. Franchisees may breach the terms of their franchise agreements in a manner that adversely affects our brands. Franchisees are subject to potential losses that are not covered by insurance that may negatively impact their ability to make payments to us and perform other obligations under franchise agreements. Franchisees generally are not "limited purpose entities", making them subject to business, credit, financial and other risks. The number and quality of franchisees is subject to change over time, which may negatively affect our business. The inability of franchisees to fund capital expenditures may adversely impact future growth. An insolvency proceeding involving a franchisee could prevent the collection of payments or the exercise of rights under the related franchise agreement. Risks Relating to Intellectual Property Third party claims with respect to intellectual property assets, if decided against us, may result in competing uses or require adoption of new, non-infringing intellectual property, which may in turn adversely affect sales and revenues. If franchisees and other sublicensees do not observe the required quality and trademark usage standards, our brands may suffer reputational damage, which could in turn adversely affect our business. Risks Related to the Applebee's Acquisition Our business strategy may not achieve the anticipated results. The significant costs that we incur in connection with the acquisition may not be offset by cost-savings in the future. We may fail to realize the anticipated benefits of the acquisition as a result of risks associated with integrating the business of Applebee's with our existing business. If we fail to improve the operations of Applebee's, we may be unable to achieve some or all of the expected benefits of the Applebee's acquisition. We incurred substantial indebtedness to finance the Applebee's acquisition which could adversely affect our business and limit our ability to plan for or respond to changes in our business. We may be unable to generate sufficient cash flow to satisfy our significant debt service obligations, which would adversely affect our financial condition and results of operations.

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49754--2/28/2008--IHOP_CORP