H1 Consideration of Risk
Legal risk refers to the threat of legal action as a result of business activity.
Reputational risk refers to the likelihood that an activity could fail to meet stakeholder expectations.
Financial risk refers to the likelihood of a company losing money as a result of decisions made.
Legal Risks
| The Coffee Hub | ||
|---|---|---|
| Assessment of Legal Risks | ||
| Item | Requirements | Consequences |
| Compliance with Food Safety Regulations | ||
| Hazard Analysis and Critical Control Point (HACCP) plan. | Identify hazards related to food production and consumption. Establish critical control points (CCPs) and critical limits, such as temperature, to ensure food safety. Continuously monitor CCPs through regular checks and documentation.Take corrective action where issues are identified. Keep records of the process. | Fines Legal action Product recalls Business closure Increased observation by regulatory bodies Reputational damage |
| Food Safety Act 1990 | Ensuring food safety through; food safety management, labelling and presentation, training, record keeping, preventative actions to protect health and reporting of illness or contamination. | |
| Licensing Requirements | ||
| Premises license | Create a detailed plan of premises, operation hours and activities. Submit application to local licnsensing authority. Display a public notice at premises and in local newspaper for 28 days. Pay fee. | Fines Legal action License review Business closure Increased observation by regulatory bodies Reputational damage |
| Food business license | This is a requirement for any business that prepares, sells or distributes food. Applications are made through the Food Standards Agency. Premises inspections may be made to ensure compliance with food safety and hygiene regulations. | |
| Employment Law Compliance | ||
| National Minimum Wage | National Minimum Wage 2024 - National Living Wage (21 and over): £11.44 per hour - 18 to 20 years old: £8.60 per hour - Under 18 years old: £6.40 per hour - Apprentices: £6.40 per hour | Fines Legal action Employee compensation Business closure Increased observation by regulatory bodies Reputational damage |
| Working time regulations | The Working Time Regulations in the UK limit employees to a maximum of 48 hours per week, averaged over 17 weeks. Employees are entitled to rest breaks, daily rest of 11 hours, and a minimum of 28 days paid annual leave. | |
| Anti-discrimination laws | Anti-discrimination laws require employers to ensure fair treatment of all employees, prohibiting discrimination based on protected characteristics like age, gender, race, and disability. Employers must promote equality and prevent harassment in the workplace. | |
Reputational Risks
| The Coffee Hub | ||
|---|---|---|
| Assessment of Reputational Risks | ||
| Item | Requirements | Consequences |
| Customer Expectations | ||
| Quality of products | Customer expect high quality coffee beans and a range of coffee types such as flat white, americano and iced coffees. Customers are increasingly expecting to have a choice of milks such as almond and oat milk. | Negative reviews Negative word of mouth Reduced customer loyalty Reduced credibility Increased marketing costs to fix reputation Lower staff morale |
| Quality of Service | Customers expect fast and firendly service and any issues to be dealt with empathy. It is important to clear tables quickly to keep the environment clean and to allow the next customer to sit down. | |
| Food Safety Incidents | ||
| Food poisoning | Regular cleaning of all surfaces, appliances, equipment and utensils. Heating food to appropriate temperatures. Storing perishable foods in refridgerators and freezers. Stock management systems to throw away expired raw materials. Hygiene facilities and protocols such as hand washing stations. Staff training to ensure hygiene standards are met. | Loss of customer trust Fines and legal action Compensation claims Increased scrutiny from regulators Negative reviews Negative word of mouth Reduced customer loyalty Reduced credibility Increased marketing costs to fix reputation Lower staff morale |
| Allergen Management | Have appropriate labelling on all goods that contain allergens such as nuts, dairy and gluten. Avoid cross contamination between foods by having separate prepparation areas and thorough cleaning protocols. Provide staff training to ensure staff communicate effectively with customers about allergens in foods and know what to do in case of emergency. | |
| Social Media Presence | ||
| Instagramable spaces | There has been a large cultural shift in the way in which young people choose locations to enjoy their leisure time. The ability to document moments on social media can have a significant impact on the enjoyment of a coffee. Coffee shops with visually appealling aesthetics can appeal tto this need and increase exposure. | Limited social media exposure Lack of appeal to large target market (Gen Z and Millennials) Increased above the line marketing costs Association with mediocracy - lack of competitive edge |
| Online reviews and feedback | Track multiple platforms to gather customer feedback. Respond to reviews within 24 hours to thank customers for their time. For negative reviews, apologise and offer to look into the issue. Take on board feedback and consider making changes to avoid future negative reviews. For more serious complaints, take communication away from public forums and consider compensation. Encourage satusfied customers to share their feedback through incentives to post and use staff training to encourage future satisfied customers. | Loss of customer trust Reduced customer loyalty Reduced credibility Increased marketing costs to fix reputation Lower staff morale |
