Dunkin' Donuts 2011 Annual Report Download - page 26

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Operational support
Substantially all of our executive management, finance, marketing, legal, technology, human resources and
operations support functions are conducted from our global headquarters in Canton, Massachusetts. In the U.S.
and Canada, our franchise operations for both brands are organized into regions, each of which is headed by a
regional vice president and directors of operations supported by field personnel who interact directly with the
franchisees. Our international businesses, excluding Canada, are organized by brand, and each brand has
dedicated marketing and restaurant operations support teams. These teams, which are organized by geographic
regions, work with our master licensees and joint venture partners to improve restaurant operations
and restaurant-level economics. Management of a franchise restaurant is the responsibility of the franchisee, who
is trained in our techniques and is responsible for ensuring that the day-to-day operations of the restaurant are in
compliance with our operating standards. We have implemented a computer-based disaster recovery program to
address the possibility that a natural (or other form of) disaster may impact the IT systems located at our Canton,
Massachusetts headquarters.
Regulatory matters
Domestic
We and our franchisees are subject to various federal, state and local laws affecting the operation of our
respective businesses, including various health, sanitation, fire and safety standards. In some jurisdictions our
restaurants are required by law to display nutritional information about our products. Each restaurant is subject to
licensing and regulation by a number of governmental authorities, which include zoning, health, safety,
sanitation, building and fire agencies in the jurisdiction in which the restaurant is located. Franchisee-owned
NDCP and CMLs are licensed and subject to similar regulations by federal, state and local governments.
We and our franchisees are also subject to the Fair Labor Standards Act and various other laws governing such
matters as minimum wage requirements, overtime and other working conditions and citizenship requirements. A
significant number of food-service personnel employed by franchisees are paid at rates related to the federal
minimum wage.
Our franchising activities are subject to the rules and regulations of the Federal Trade Commission (“FTC”) and
various state laws regulating the offer and sale of franchises. The FTC’s franchise rule and various state laws
require that we furnish a franchise disclosure document (“FDD”) containing certain information to prospective
franchisees and a number of states require registration of the FDD with state authorities. We are operating under
exemptions from registration in several states based on our experience and aggregate net worth. Substantive state
laws that regulate the franchisor-franchisee relationship exist in a substantial number of states, and bills have
been introduced in Congress from time to time that would provide for federal regulation of the franchisor-
franchisee relationship. The state laws often limit, among other things, the duration and scope of non-competition
provisions, the ability of a franchisor to terminate or refuse to renew a franchise and the ability of a franchisor to
designate sources of supply. We believe that our FDDs for each of our Dunkin’ Donuts brand and our Baskin-
Robbins brand, together with any applicable state versions or supplements, and franchising procedures, comply
in all material respects with both the FTC franchise rule and all applicable state laws regulating franchising in
those states in which we have offered franchises.
International
Internationally, we and our franchisees are subject to national and local laws and regulations that often are
similar to those affecting us and our franchisees in the U.S., including laws and regulations concerning
franchises, labor, health, sanitation and safety. International Baskin-Robbins brand and Dunkin’ Donuts brand
restaurants are also often subject to tariffs and regulations on imported commodities and equipment, and laws
regulating foreign investment. We believe that the international disclosure statements, franchise offering
documents and franchising procedures for our Baskin-Robbins brand and Dunkin’ Donuts brand comply in all
material respects with the laws of the applicable countries.
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