Domino’s ends long-running dispute with franchise partners
The pizza chain said franchisees will open more stores across the UK in return for a £20m investment from the company.
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Your support makes all the difference.Domino’s Pizza and its franchise partners have ended a long-running dispute.
The company said it will invest £20 million over the next three years, with franchise owners agreeing to increase the speed of new store openings.
Wrangling between the two sides stretches back over a number of years but chief executive Dominic Paul said the issue is now over and the deal is a “great resolution”.
Domino’s added that the UK business has struggled in comparison with the company’s global empire but the deal “can begin a new era of collaboration in which the system can realise its full potential”.
Under the deal, Domino’s will spend £20 million over three years for digital acceleration and in-store innovation to support franchisees in winning new customers.
There will be an increase in marketing spend and a new food rebate system to encourage order growth.
Domino’s will also improve its new store incentive schemes.
In return, franchisees have agreed to increase the number of new store openings to around 45 a year over the next three years and participate in national promotions.
Domino’s relies heavily on promotions but these tend to be set locally by each franchise partner, making national deals difficult to launch.
Franchisees must also agree to prioritise, test, and roll out new technology and product innovation and to trial new store formats.
The deal will last for three years from January before being reviewed.
This is an important moment for Domino's, and I'm delighted we have reached what is truly a great resolution with our franchisees
Bosses said that, as a result of the plans, they expect medium-term sales to increase to between £1.6 billion and £1.9 billion, with more than 200 stores.
Mr Paul said: “This is an important moment for Domino’s, and I’m delighted we have reached what is truly a great resolution with our franchisees.
“We saw first-hand through the pandemic how, when we work together, we win together.
“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 chairman of the Domino’s Franchisee Association (DFA), said: “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.”
The two sides fell out while former chief executive David Wild was running the company, as franchisees refused to open more stores.
He stepped down in 2019, paving the way for new boss Mr Paul – the former head of Costa Coffee – to take over the negotiations.