Buying a Domino’s Franchise

This article is based on its most recent FDD. Keep reading or watch the  video originally recorded on Vetted Biz Youtube Channel

Vetted Biz is the leading platform for accessible and analytical data on franchises and businesses available in the U.S. Our research team has reviewed over 2,900 franchises and knows the key facts and data that signal a successful franchise system. Upon extensive review using several internet research tools, our team was able to compile a shortlist of the “Top 20 Most Popular Franchises in the United States.” In the article below, we review the business model proposed by one of these 20 franchises: Domino’s Pizza, as well as the requirements that encompass its franchise application process.

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About Domino’s Pizza

Domino’s Pizza’s story began in 1960 when brothers Tom and James Monaghan purchased DomiNick’s pizza shop for $500 in Michigan. After five years of the concept’s growing success, Tom Monaghan – now the sole owner of DomiNick’s – changed the shop’s name to Domino’s Pizza and began franchising the concept to expand across the state.  The first franchised Domino’s Pizza location opened in 1967 and by 1978 had already expanded to 200 stores. Today, Domino’s Pizza now has more than 17,000 franchised and company-owned stores in over 60 countries and across six continents. Domino’s Pizza is currently headquartered in Ann Arbor, Michigan, and is run by its CEO Richard E. Allison Jr. He previously served as President and Executive Vice President of Domino’s International.

How Much Is A Domino’s Pizza Franchise?

The total investment amount to establish a Domino’s Pizza franchise ranges from $119,950 to $461,700. This includes the company’s franchise fee of $25,000. Once the store has been built and operations begin, franchisees are expected to pay the parent company a royalty fee of 5.5% on gross sales, and a marketing fee of 3% in exchange for the marketing services provided by the franchisor. The franchisor particularly requires franchisees to manage a store for at least one year before being granted a franchise, hence why the majority of franchisees began their careers as hourly employees of Domino’s.

Additionally, Domino’s Pizza does not allow franchisees to have business interests outside the franchise location. And instead, owners must have at least 51% ownership and be willing to personally oversee store operations daily. Finally, the franchisor requires all candidates have a minimum net worth of $250,000 and liquid assets totaling at least $75,000.

Domino’s Pizza in Numbers

When evaluating a Domino’s Pizza franchise’s potential for growth one does not need to go beyond Quick Service Restaurant numbers to better understand the prospect for success of the opportunity at hand. The fast-food industry generated $200 billion in revenues in 2015. And the industry has since been expected to have an annual growth of 2.5% for the following subsequent years.

Domino’s Pizza itself was recently named the No.1 pizza chain. And in 2019 was ranked number 9 in QSR Magazine’s top 50. Looking at the franchise’s internal performance, the average weekly unit sales for franchised locations in 2018 was $22,045 out of which 42% of stores either met or exceeded this average. Additionally, it was found that only 22 traditional franchises ceased operations in the year 2019. An insignificant value when contrasted with the total amount of franchises under Domino’s Pizza’s franchise system.

Moving forward, Domino’s Pizza is looking to establish new units across several states.

Summary

Investing in a Domino’s Pizza franchise is an interesting opportunity. Especially for individuals looking to make their way into the QSR industry.  The prospects for growth and success within the industry and the Domino’s Pizza brand itself, are extensive. And several markets continue to be available as they move forward with growing their presence across the country. If you are an individual open to managing a Domino’s Pizza store for a year and are willing to invest an amount ranging from $119,950 to $461,700 or more, Domino’s Pizza is the right franchise for you!