Declining RevenueA year-over-year revenue decline signals weakening demand or market share pressure in the core restaurant business. Persistent top-line erosion undermines operating leverage, makes fixed-cost absorption harder, and limits the firm's ability to fund growth or improve margins without strategic changes to pricing, menu or footprint.
Free Cash Flow CollapseA swing to large negative free cash flow materially reduces liquidity and the capacity to fund capex, dividends, or debt service from operations. Over months this constrains strategic flexibility, increases reliance on external financing, and elevates refinancing and covenant risk if negative cash conversion persists.
Rising Debt LevelsIncreasing total debt alongside moderate leverage raises financial risk, particularly given weak cash conversion. Higher leverage limits maneuverability for investment or restructuring, raises interest and covenant exposure, and could stress the balance sheet if operating performance or FCF does not recover in the coming months.