testing, we cannot control the materials used by our manufacturers.  If one of these manufacturers ships merchandise that does not  meet our required standards, we could in turn experience negative  publicity or be sued.  Many of our products are used by small children and infants who may  be injured from usage if age grading or warnings are not followed.  We may decide or be required to recall products or be subject to  claims or lawsuits resulting from injuries. For example, we have  voluntarily recalled five products in the past five years due to possible  safety issues. While the vendors have historically reimbursed us  for certain, related expenses, negative publicity in the event of any  recall or if any children are injured from our products could have a  material adverse effect on sales of our products and our business, and  related recalls or lawsuits with respect to such injuries could have  a material adverse effect on our financial position. Additionally, we  could incur fines related to consumer product safety issues from the  regulatory authorities in the countries in which we operate. Although  we currently have liability insurance, we cannot assure you that it  would cover product recalls or related fines, and we face the risk that  claims or liabilities will exceed our insurance coverage. Furthermore,  we may not be able to maintain adequate liability insurance in the  future.  The success of our business depends upon the quality of associates  throughout our organization. Because guest service is a defining  feature of the Build-A-Bear Workshop experience, we must be able  to hire and train qualified managers and Bear Builder ®   associates  to succeed. We closed 47 stores in 2012 and 2013 and expect to close  an additional ten to fifteen stores in 2014. Having fewer stores may  limit promotion opportunities in the future for current associates,  which may have a negative impact on our ability to retain quality  employees, which may in turn have a negative impact on our results  of operations. Additionally, our Founder and Chief Executive Bear  retired from the Company in July 2013 six weeks after we hired a  new Chief Executive Officer. The success of our business depends  on an effective transition. During this transition period, however,  organizational changes are likely to occur, and we may not be able  to retain key senior managers or associates. The loss of certain key  employees, our inability to attract and retain other qualified key  employees or a labor shortage that reduces the pool of qualified  candidates could have a material adverse effect on our business,  financial condition and results of operations.  We do not own or operate any manufacturing facilities. For the past  three years, we purchased approximately 80% of our merchandise  from three vendors. These vendors in turn contract for our orders  with multiple manufacturing facilities located primarily in China  for the production of merchandise. Our relationships with our  vendors generally are on a purchase order basis and do not provide  a contractual obligation to provide adequate supply or acceptable  pricing on a long-term basis. Our vendors could discontinue sourcing  merchandise for us at any time. If any of our significant vendors  were to discontinue their relationship with us, or if the factories with  which they contract were to suffer a disruption in their production,  we may be unable to replace the vendors in a timely manner, which  could result in short-term disruption to our inventory flow or quality  of the inventory as we transition our orders to new vendors or  factories which could, in turn, disrupt our store operations and have  an adverse effect on our business, financial condition and results  of operations. For example in 2011, one factory used by one of our  vendors closed unexpectedly, causing us to quickly switch factories  for one product, affecting the quality and flow of the product.  Additionally, in the event of a significant price increase from these  suppliers, we may not be able to find alternative sources of supply in  a timely manner or raise prices to offset the increases, which could  have an adverse effect on our business, financial condition and  results of operations. As of December 28, 2013, there were 86 Build-A-Bear Workshop  franchised stores located outside of the United States, Canada,  the United Kingdom and Ireland. We cannot assure you that our  franchisees will be successful in identifying and securing desirable  locations or in operating their stores. International markets  frequently have different demographic characteristics, competitive  conditions, consumer tastes and discretionary spending patterns  than our existing North American and European markets, which may  cause these stores to be less successful than those in our existing  markets. Additionally, our franchisees may experience financing,  merchandising and distribution expenses and challenges that are  different from those we currently encounter in our existing markets.  The operations and results of our franchisees could be negatively  impacted by the economic or political factors in the countries  in which they operate or foreign currency fluctuations. These  challenges, as well as others, could have a material adverse effect on  our business, financial condition and results of operations.  The success of our franchising strategy will depend upon our ability  to attract and maintain qualified franchisees with sufficient financial  resources to develop and grow the franchise operation and upon  the ability of those franchisees to successfully develop and operate  2013 FORM 10-K 10  BUILD-A-BEAR WORKSHOP, INC.  We rely on a few vendors to supply substantially all of our  merchandise, and significant price increases or any disruption in  their ability to deliver merchandise could harm our ability to source  products and supply inventory to our stores.  If we are not able to franchise new stores outside of the United  States, Canada, the United Kingdom and Ireland, if we are unable  to effectively manage our international franchises or if the laws  relating to our international franchises change, our growth and  profitability could be adversely affected and we could be exposed to  additional liability.  We may not be able to operate successfully if we lose key personnel,  are unable to hire qualified additional personnel, or experience  turnover of our management team. 