RARE » Topics » THE FOOD SERVICE INDUSTRY IS AFFECTED BY LITIGATION AND PUBLICITY CONCERNING FOOD QUALITY, HEALTH AND OTHER ISSUES, WHICHCAN CAUSE CUSTOMERS TO AVOID OUR PRODUCTS AND RESULT IN LIABILITIES
This excerpt taken from the RARE 10-K filed Mar 10, 2005.
THE FOOD SERVICE
INDUSTRY IS AFFECTED BY LITIGATION AND PUBLICITY CONCERNING FOOD QUALITY, HEALTH AND
OTHER ISSUES, WHICHCAN CAUSE CUSTOMERS TO AVOID OUR PRODUCTS AND RESULT IN LIABILITIES
Food service businesses can be
adversely affected by litigation and complaints from customers or government authorities
resulting from food quality, illness, injury or other health concerns, guest service
patterns or other operating issues stemming from one store or a limited number of stores,
including stores operated by our franchisees or other food service operators. Adverse
publicity about these allegations may negatively affect us, regardless of whether the
allegations are true, by discouraging customers from buying our products. Because one of
our competitive strengths is the taste and quality of our food, adverse publicity relating
to food quality or other similar concerns affects us more than it would food service
businesses that compete primarily on other factors. We could also incur significant
liabilities if a lawsuit or claim resulted in a decision against us, or in significant
litigation costs, regardless of the result.
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