Dunkin' Donuts 2013 Annual Report Download - page 18

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Baskin-Robbins
The Baskin-Robbins manufacturing network is comprised of nine facilities, none of which are owned or operated by us, that
supply our international markets with ice cream products. We utilize a facility owned by Dean Foods to produce ice cream
products which we purchase and distribute to many of our international markets. Certain international franchisees rely on third
party-owned facilities to supply ice cream products to them, including facilities in Ireland and Canada. The Baskin-Robbins
brand restaurants in India and Russia are supported by master franchisee-owned facilities in those respective countries while
the restaurants in Japan and South Korea are supported by the joint venture-owned facilities located within each country.
Research and development
New product innovation is a critical component of our success. We believe the development of successful new products for
each brand attracts new customers, increases comparable store sales, and allows franchisees to expand into other dayparts. New
product research and development is located in a state-of-the-art facility at our headquarters in Canton, Massachusetts. The
facility includes a sensory lab, a quality assurance lab and a demonstration test kitchen. We rely on our internal culinary team,
which uses consumer research, to develop and test new products.
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 information technology 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.