Domino’s reaches franchisee resolution

Domino’s Pizza Group plc has announced that it has reached a resolution with its franchisees after the board reportedly recognised that Domino’s “lagged” in recent years compared to its businesses around the world. The resolution is set to tackle this issue and to accelerate both near-term and long-term growth. The resolution will run for an initial period of three years from 3 January 2022, and it was reached between the company and the Domino’s Franchisee Association (“DFA”), with 99% of franchisees voting in favour of the resolution. Under the resolution, Domino’s has committed to a one-time capital investment of £20m, spread over three years, in digital acceleration, personalisation, ecommerce app development and in-store innovation to “enhance the customer experience and drive top-line growth”. Additionally, the resolution promises increased marketing investment to support new national campaigns and promotions, an enhanced food rebate mechanism for franchisees to encourage order growth, and an improved new store incentive scheme. In return for Domino’s investments, the franchisees have agreed to an enhanced schedule of new store openings, equating to at least 45 new stores to be opened per annum over the next three years. The franchisees have also agreed to prioritise, test, and roll-out new technology and product innovation, such as GPS tracking, and to test new store formats to drive efficiency across the system. Domino’s said the resolution is a “great outcome” for all stakeholders as it stands to improve growth and profitability for both the company and its franchisees with increased system sales and new store openings. Dominic Paul, Domino’s CEO, said: “I firmly believe that the resolution we have reached is a good one for franchisees, our people, and our shareholders. It means that our interests are aligned, and we are now in an even stronger position to execute our strategic plan.” Mark Millar, DFA chairman, added: “This framework for growth is the result of many months of discussions, and the DFA and its members are pleased to have reached an agreement that brings Domino’s and its franchisees closer together and enables us to focus on a future that delivers growth for all.”