In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Domino’s Pizza franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Domino’s Pizza franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Domino’s Pizza franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Domino’s Pizza’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2015, 2014, 2013, 2012, and 2011 average weekly unit sales for company-owned, franchised, and combined company-owned and franchised Domino’s Pizza Stores, including Domino’s Pizza Traditional Stores, Domino’s Pizza Non-Traditional Stores, and Domino’s Pizza Transitional Stores
- 2015, 2014, 2013, 2012, and 2011 store count at year-end for company-owned, franchised, and combined company-owned and franchised Domino’s Pizza Stores, including Domino’s Pizza Traditional Stores, Domino’s Pizza Non-Traditional Stores, and Domino’s Pizza Transitional Stores
- number and percentage of Domino’s Pizza Stores in operation at year-end 2015, 2014, 2013, 2012, and 2011 that achieved or exceeded the average weekly unit sales for the year
- average total variable costs, total fixed costs, and EBITDA for franchised Domino’s Pizza Stores that submitted complete and properly prepared profit and loss statements with average weekly unit sales of <$10,000; $10,001 to $15,000; $15,001 to $20,000; $20,001 to $25,000; and $25,001+, respectively
Section I – Background Information
14 Things You Need to Know About the Domino’s Pizza Franchise
Played Games to Raise Money for St. Jude Children’s Research Hospital
1. On April 28, Domino’s Pizza participated in the 4th annual St. Jude PLAY LIVE fundraiser. The program encourages participants to stream their video games while raising money for St. Jude Children’s Research Hospital. This is the third year that Domino’s has participated in the event.
2. During the PLAY LIVE event, Domino’s team members live streamed games from the Domino’s World Resource Center in Ann Arbor, Michigan and were joined online by other team members across the country.
3. Domino’s has partnered with St. Jude Children’s Research Hospital for over 14 years and has raised over $38 million for the hospital.
Opened Its 14,000th Store Worldwide
4. In early April, Domino’s celebrated the grand opening of its 14,000th store in Cyberjaya, Malaysia, outside of the nation’s capital of Kuala Lumpur. According to Patrick Doyle, Domino’s President and CEO, the company opened its 13,000th location just eight months prior. Doyle also said that in 2016, Domino’s opened a new store about every seven hours.
5. The new location was also a milestone for the Malaysian market, as it marks the country’s 200th store opening. It was also the 3,500th location in the Asia-Pacific region. The location features Domino’s theater store design, which is an open-kitchen concept that allows customers to watch their pizzas being made, every step of the way.
Launched First-Ever Loyalty Member Appreciation Week
6. From April 10 to April 16, Domino’s held its first-ever loyalty member appreciation week by giving members of its Piece of the Pie Rewards program double the points on every online order of $10 or more. According to Russell Weiner, President of Domino’s USA, the Piece of the Pie Rewards program now has millions of members and the company wanted to celebrate and thank them with double the points.
Domino’s to Begin Using Robots to Deliver Pizzas in Europe
7. In late March, Starship Technologies, the London-based company that has created six-wheeled self-driving delivery robots, will begin delivering Domino’s pizzas in Germany and the Netherlands. Starship says that the robots will deliver pizzas to customers who live within a one-mile radius of certain Domino’s Pizza shops in select German and Dutch cities.
8. Starship’s robots are designed to operate on sidewalks and have a maximum speed of four miles per hour carrying a load of up to 20 pounds. The robot’s cargo hold can only be unlocked with a code sent to the customer’s mobile phone. Starship says that depending on the size, the robots can hold up to eight pizzas or a variety of combinations of pizzas, sides, cold drinks, and desserts.
9. To oversee the project, Domino’s Pizza Enterprises Ltd., the world’s largest franchise owner of Domino’s Pizza, has formed a group called the Domino’s Robotic Unit. According to Don Meij, CEO of Domino’s Pizza Enterprises, with the company’s growth plans over the next five to ten years, there simply won’t be enough delivery drivers to meet the demand and the company must look at other innovative ways to add to its fleet.
10. Domino’s tested other autonomous vehicles for delivery in Australia and New Zealand in 2016. The company also delivered a pizza by drone last November in New Zealand.
11. In 1960, brothers Tom and James Monaghan purchased DomiNick’s, a small pizza store in Ypsilanti, Michigan near Eastern Michigan University. Within eight months of owning the pizza store, James traded his half of the business to Tom for the Volkswagen Beetle they used for pizza deliveries.
12. By 1965, Tom Monaghan purchased two additional pizzerias in the same county. Monaghan wanted all three pizza shops to share branding but the original owner wouldn’t allow him to use the DomiNick’s name. An employee suggested the name Domino’s and Monaghan renamed the business Domino’s Pizza, Inc. in 1965.
13. The first franchise store opened in 1967 in the same city as the original DomiNick’s location. Today, there are over 14,000 Domino’s Pizza locations around the world.
Entrepreneur’s Franchise 500
14. Domino’s Pizza has only ranked on Entrepreneur’s annual Franchise 500 list a few times in the last decade. The company’s highest rank was No. 6 in 2007, while its lowest rank was No. 41 in 2009. Domino’s has not appeared on Entrepreneur’s list since 2009.
Section II – Estimated Costs
- Please click here for detailed estimates of Domino’s Pizza franchise costs, based on Item 7 of the company’s 2017 FDD (updated).
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Domino’s Pizza’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.