In the highly competitive world of pizza retailing, Domino’s are the big boys on the block. In both sales and store numbers they are #1, well ahead of rivals such as Pizza Hut.
Domino’s began life in 1960 in Ypsilanti, Michigan as a single pizza restaurant. Today, the company is headquartered in Ann Arbor, Michigan and operates in over 90 other countries. With more than 20,000 outlets globally, Domino’s are by far the largest pizza company in the world. They have offered franchise opportunities since 1967.
Domino’s at a glance:
You can get into a Domino’s pizza franchise for relatively low dollars and the minimum $80k liquid cash and $250k net worth requirements should not be an issue for many investors. However, you face a major roadblock if you have never worked for this company. Domino’s currently only offer new franchise licenses to entrepreneurs who have a minimum of one years’ experience working at a Domino’s store in a general manager or supervisor capacity. In other words, you need to be in this club to join this club, making it very difficult for outsiders to gain entry. Domino’s also expect franchisees to play a major role in the daily running and success of the store. This opportunity is not suitable for passive investment.
Starting your own Domino’s pizza business can cost anywhere from $260,000 to $350,000 depending on the type and size of your operation – a cost range that ranks as low to high.
Currently, Domino’s offer two types of franchise opportunity:
The initial franchise fee is $25,000. Military veterans may be eligible for a 20% discount off this cost.
After opening, you are required to pay an array of ongoing fees and charges. They include:
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Your results
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| Key Costs Guide | Low | High |
|---|---|---|
| Franchise fee | $25,000 | $25,000 |
| Leasehold improvements | $5,000 | $350,000 |
| Furniture, fixtures, equipment | $62,000 | $145,000 |
| Signage | $5,200 | $32,000 |
| 3 months’ rent | $3,000 | $25,000 |
| Security deposit | $1,000 | $10,000 |
| Opening inventory and supplies | $2,750 | $6,500 |
| Opening advertising and promotion | $0 | $3,000 |
| Training expenses | $1,000 | $4,000 |
| Insurance | $15,000 | $75,000 |
| Miscellaneous opening costs | $2,500 | $7,000 |
| Additional costs – first three months | $10,000 | $73,000 |
Yes. Domino’s pizza restaurants typically generate profits of 10% to 20% of gross sales, giving potential net income to the franchise owner of $130,000 to $260,000 per year. This ranks as good to excellent and could recoup the typical Domino’s franchise investment of $419,000 in 5.8 to 4 years.
Almost zero. The failure rate for a Domino’s franchise is 1% in year one, remaining at 1% by year three. This ranks as very low.
Franchisees do not receive an exclusive territory under the Traditional Store Franchise Agreement or the Non-Traditional Store Franchise Agreement. However, under a Traditional Store Franchise Agreement the franchisee is assigned an ‘area of primary responsibility’. The boundaries of this area are a one mile radius around the store, a one mile radius from a street intersection or a written description equivalent to a one mile radius, except in densely populated areas, where it will usually be a 1/2 mile radius. During the term of the franchise agreement, neither Domino’s nor its affiliates will operate or grant a new franchise for a store whose territory overlaps your area of primary responsibility.
The company may periodically adjust the boundaries in which your store offers delivery service to reflect changing market conditions, population changes and other relevant considerations.
Domino’s support for franchisees includes:
Low start-up costs. Growing sales. Excellent profits. Almost zero failure rate. What’s not to like? The only dampener is the hoops you have to jump through to become a Domino’s franchise owner. However, maybe that’s what makes this franchise such a great opportunity – the business only works with investors who know how it works, which keeps results so high. Becoming a Domino’s employee to get necessary management experience could be well worth the effort.
Unlike most other franchise operators, Domino’s currently demand that new franchise owners must have at least 12 months’ experience as a general manager or supervisor in one of their stores. If you’re interested in joining Domino’s as an employee to gain this necessary internal experience, you can learn more about the process here.
Starting a new franchise can be an exciting opportunity, but it’s easy to get lost in a maze of business loan applications that can make funding your new pizza business like too much hard work. Instead, cut out the hassle and cut to the chase. Swoop has the best lenders for the best franchises across Canada. Just tell us what you need and leave the rest to us.
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Written by
Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.
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