IBERSOL | Integrated Management Report - 2024

INTEGRATED MANAGEMENT REPORT 2024 3. Operational Risk Management 3.1. Risks of the global context The Ibersol Group pays special attention to the global geopolitical context, namely the war in Ukraine and the conflict in Gaza and adjoining territories, whose effects on the global economy (shortages of goods and energy, logistical disruptions, ris- ing inflation) and on society have been significant and may yet worsen, making the entire global context more complex in the medium and long term, with changes to global food supply chains, which have consequences for operations and business profitability. 3.2. Risks of development and franchise agreements In previous years, the Group signed development contracts with Taco Bell, KFC (for Portugal and Spain) and Pret a Manger (Portugal and Spain). These development contracts guarantee the right and obligation to open new res- taurants (in exceptional circumstances, such as the pandemic crisis, readjustments to the development programs were agreed upon). In case of non-fulfillment of the opening plans foreseen in these contracts the franchisors may terminate the respec- tive development contracts. In 31 December 2024, the Group has not completed all the planned openings of KFC restaurants in Spain, and is negotiating with KFC to revise the current development contracts In addition, the development agreements provide for requirements and conditions to be met prior to the sale of the controlling interest of the subsidiary that oper- ates the agreement, the issuance of capital instruments and/or change of control in those subsidiaries, as well as the sale of the business or restaurants owned by said subsidiaries, which include, among others: the prior agreement of the franchisors, in- formation obligations and several transfer procedures, possible payment of charges or fees, as well as the right of first refusal in favor of the franchisors. The franchise contracts in relation to some international brands foresee the possibility of termina- tion in case of change of control of Ibersol SGPS, S.A. without the franchisor’s prior agreement. In the restaurants where it operates with international brands, the group enters into long-term franchise contracts: 10 years in the case of Pizza Hut, Taco Bell and KFC and up to 12 years in the case of Prêt A Manger, renewable for another 10 years at the franchisee’s option, as long as certain obligations are met. It has been the practice for these contracts to be renewed upon expiration. However, nothing obliges franchisors to do so, so there may be the risk of non-renewal. 375