In 2015, the fast casual chain Chipotle had over 500 custome…
In 2015, the fast casual chain Chipotle had over 500 customers in 43 different stores become ill from food that was contaminated with salmonella and E. Coli. As a result, Chipotle settled a product liability lawsuit with the victims of the food-borne illness, where the company paid a total of $25 million in the class-action settlement. This resulted in significant negative publicity from news outlets and social media. As a result of this, in the weeks following the event Chipotle had its biggest decrease in customer traffic, and in turn revenue, in company history. What risk does the underlined portion of the above scenario represent?
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