Duskin has formulated Basic Rules on Risk Management that stipulate how risk is to be managed in the Duskin corporate group. In accordance with these rules, there is a risk management department and supervisors. At our subsidiaries, we name a risk management supervisor at each company in accordance with its size, types of business activities, and other characteristics. We conduct risk management in a consolidated, comprehensive manner.
Duskin has a Risk Management Committee, as an advisory council for the Board of Directors. The committee was held twice in fiscal 2018. It discussed and reported on Duskin's risk management annual plans, the causes of the risks that have occurred, and the measures to be taken to counter them, and results of auditing and business continuity plan (BCP).
In the event of an incident that may have a major impact on the Duskin Group, a response office is established.
Each department identifies the risks that are specific to its responsibilities and analyzes their significance. Then, response measures for each presumed risk factor are formulated according to Risk Prevention Manual.
Every year, risk management departments and the secretariat office review and evaluate countermeasures and their effectiveness. With the feedback of these reviews and evaluations, all departments examine and enhance their countermeasures. Each department identifies new possible risks based on the information on revisions of laws and regulations and any crisis that occurred at Duskin. Each department formulates and implements its own risk management programs.
|Difficulty to obtain consent and cooperation from franchisees, which leads to suspension or delay of business plans||Sufficient communication to obtain consent for cooperation and sharing expenses from franchisees for development and introduction of new products and services, new shop openings and renovation of existing shops|
|Termination/cancellation by franchisees, lawsuits with franchisees, violations of laws and ordinances by franchisees and scandals||Improve programs to provide guidance and training while further building relationships with franchisees.|
|Change in business environment||Dust control business: shrinking size of the market||Develop products, expand sales channels, and respond to diversified payment methods. New franchise recruitment for Care Service Businesses for business expansion in the growing market.|
|Mister Donut business: market trends, competition, change of consumers' preferences and higher cost of ingredients||New openings in urban and suburban areas, shop renovations and relocations to meet customers' needs and locational factors, value-added menu development, and expansion in Asia.|
|Product safety||Quality problems of products provided by Direct Selling Group||Objectively check safety and reliability of the products starting with the development stage. After product launches, conduct, from time to time, a quality check of the products distributed in the market and maintain quality standards.|
|Food safety||Food poisoning, violation of laws and ordinances, including Food Sanitation Act at our shops and restaurants||Develop and operate an internal system to maintain food safety, including production of a sanitary management guide, and perform regular voluntary inspections using third party experts.|
|Service quality||Liabilities for accidents occurred during service provision. Health hazards arising from service defects or problems involving equipment and materials||Improve skills of service staff by training them how to prevent from accidents and to respond to emergencies. Develop and maintain manuals. Improve service quality and consistency through staff training and licensing programs.|
|Procurement||Difficulties in production of products due to unexpected natural disasters and other emergencies||Procure products from multiple suppliers except the products purchased from specific singular suppliers because of a unique production technology.|
|Natural disasters||Suspension of business operations or damage to facilities caused by large-scale natural disasters such as earthquakes, typhoons and floods||To minimize the damage caused by natural disasters, establish a safety confirmation system, prepare response manuals, maintain a business continuity plan, and conduct disaster response drills.|
|Information security||Significant problems such as personal information leaks caused by unauthorized access||Develop and operate a management system for handling personal information, including regulations such as Personal Information Protection Rules, training for executives and employees, seminars for franchisees, and measures for IT system security.|