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Domino's Pizza, Inc.
Company typePublic
NYSE: DPZ
S&P 400 Component
ISINUS25754A2015
Industry
Founded(December 9, 1960; 63 years ago (1960-12-09)) in Ypsilanti, Michigan, US
Founders
  • James Monaghan
  • Tom Monaghan
HeadquartersDomino's Farms Office Park,
Ann Arbor, Michigan
,
US
Number of locations
Increase 13,811
(FY January 1, 2017)
Area served
Worldwide
Key people
David A. Brandon
(Chairman)
J. Patrick Doyle
(President and CEO)
Products
RevenueIncrease US$ 2.47 billion
(FY January 1, 2017)
Increase US$ 454.04 million
(FY January 1, 2017)
Increase US$ 214.68 million
(FY January 1, 2017)
Total assetsDecrease US$ 716.30 million
(FY January 1, 2017)
Total equityDecrease US$ -1.88 billion
(FY January 1, 2017)
Number of employees
~14,100 (FY January 1, 2017)
(company-owned stores & offices)
~290,000 (FY January 1, 2017)
(including franchises)
Websitedominos.com
Footnotes / references
[1][2][3][4][5][6][7]

Domino’s Pizza, Inc.[7], now branded simply as Domino's, is an American pizza restaurant chain founded in 1960. The corporation is headquartered at the Domino's Farms Office Park in Ann Arbor, Michigan.[3][5] In February 2018, the chain became the largest pizza seller worldwide, and in the United States, in terms of sales.[8]

History

1960s–1990s

On December 9, 1960, Tom Monaghan and his brother, James, took over the operation of DomiNick's, an existing location of a small pizza restaurant chain that had been owned by Dominick DiVarti, at 507 Cross Street (now 301 West Cross Street) [9] in Ypsilanti, Michigan [10], near Eastern Michigan University.[11] The deal was secured by a $500 down payment, and the brothers borrowed $900 to pay for the store.[12] The brothers planned to split the work hours evenly, but James did not want to quit his job as a full-time postman to keep up with the demands of the new business. Within eight months, James traded his half of the business to Tom for the Volkswagen Beetle they used for pizza deliveries.[12]

By 1965, Tom Monaghan had purchased two additional pizzerias; he now had a total of three locations in the same county. Monaghan wanted the stores to share the same branding, but the original owner forbade him from using the DomiNick's name. One day, an employee, Jim Kennedy, returned from a pizza delivery and suggested the name "Domino's" [9] Monaghan immediately loved the idea and officially renamed the business Domino's Pizza, Inc. in 1965.[12]

The company logo originally had three dots, representing the three stores in 1965.[12] Monaghan planned to add a new dot with the addition of every new store, but this idea quickly faded, as Domino's experienced rapid growth.[12] Domino's Pizza opened its first franchise location in 1967[13] and by 1978, the company expanded to 200 stores.[14] In 1975, Domino's faced a lawsuit by Amstar Corporation, the maker of Domino Sugar, alleging trademark infringement and unfair competition. On May 2, 1980, the Fifth Circuit Court of Appeals in New Orleans found in favor of Domino's Pizza.[15]

International expansion

Domino's Pizza in the Nieuw-Vennep, The Netherlands
The store interior of a Domino's Pizza
Dominos Pizza in Tuxtla Gutiérrez, Chiapas, Mexico
Domino's outlet in Himayatnagar, Hyderabad, Telangana, India

On May 12, 1983, Domino's opened its first international store, in Winnipeg, Manitoba, Canada.[16] That same year, Domino's opened its 100th store, its first in Vancouver, Washington. In 1985, the chain opened their first store in the United Kingdom in Luton.[17] Also, in 1985, Domino's opened their first store in Tokyo, Japan. In 1993, they became the second American franchise to open in the Dominican Republic and the first one to open in Haiti, under the direction of entrepreneur Luis de Jesús Rodríguez.[18] By 1995, Domino's had expanded to 1,000 international locations. In 1997, Domino's opened its 1,500th international location, opening seven stores in one day across five continents.[19] By 2014, the company had grown to 6,000 international locations and was planning to expand to pizza's birthplace, Italy; this was achieved on October 5, 2015, in Milan, with their first Italian location. CEO Patrick Doyle, in May 2014, said the company would concentrate on its delivery model there.[20]

In February 2016, Domino's opened its 1,000th store in India.[21]

China

Domino's Pizza chose to use its traditional delivery-based business model in China, neither altering its flavors nor reducing the sizes of pizzas,[22] and promising a 30-minute delivery time.[23] The delivery time promise failed due to Chinese automobile traffic patterns stymieing the delivery operations.[23] The large pizza sizes prevented Chinese people from using knives and forks to eat them,[22] and takeout services were unpopular with Chinese people due to cultural reasons.[24] Savio S. Chan (Chinese: 陳少宏; pinyin: Chén Shàohóng) and Michael Zakkour, authors of China's Super Consumers: What 1 Billion Customers Want and How to Sell it to Them, wrote that Domino's "failed miserably" in its strategy,[23] resulting in the company being "basically" irrelevant in China, with 40 restaurants as of 2014.[22] By January 2014, the company introduced small restaurants in the China market. Jamie Fullerton of Vice stated that these restaurants served "solid, mildly overpriced pizzas" and did not have unique-to-China menu items.[25]

Puerto Rico

On August 9, 2017, Domino's Pizza closed all stores in Puerto Rico, after ending it's franchise agreement with HFS Corp, filed for chapter 7 bankruptcy, as reported by News Is My Business.

Sale

In 1998, after 38 years of ownership, Domino's founder Tom Monaghan announced his retirement, sold 93 percent of the company to Bain Capital, Inc. for about $1 billion, and ceased being involved in day-to-day operations of the company.[26] A year later, the company named Dave Brandon as its CEO.[27]

Present

Domino's Pizza logo used from 1996 until September 2012 in major English-speaking countries, and still used in many others

In 2004, after 44 years as a privately held company, Domino's began trading common stock on the New York Stock Exchange under the ticker symbol "DPZ".[28] Industry trade publication Pizza Today magazine named Domino's Pizza "Chain of the Year" in 2003, 2010, and 2011.[29][30][31] In a simultaneous celebration in January 2006, Domino's opened its 5,000th U.S. store in Huntley, Illinois, and its 3,000th international store in Panama City, Panama, making 8,000 total stores for the system.[32] In August 2006, the Domino's location in Tallaght, Dublin, Ireland, became the first store in Domino's history to hit a turnover of $3 million (€2.35 million) per year.[33] As of September 2006, Domino's has 8,200+ stores worldwide, which totaled $1.4 billion in gross income.[34]

Innovations

In 2007, Domino's introduced its Veterans Delivering the Dream franchising program and also rolled out its online and mobile ordering sites.[14] In 2008, Domino's introduced the Pizza Tracker, an online application that allows customers to view the status of their order in a real time progress bar.[35] The first Domino's with a dining room opened in Stephenville, Texas, giving the customers the option to either eat in or take their pizza home. Since 2005, the voice of Domino's Pizza's US phone ordering service has been Kevin Railsback.[36]

In a 2009 survey of consumer taste preferences among national chains by Brand Keys, Domino's was last — tied with Chuck E. Cheese's. In December that year, Domino's announced plans to entirely reinvent its pizza. It began a self-critical ad campaign in which consumers were filmed criticizing the then-current pizza's quality and chefs were shown developing a new pizza.[37][38] The new pizza was unveiled that same month. The following year, 2010 and Domino's 50th anniversary, the company hired J. Patrick Doyle as its new CEO and experienced a 14.3% quarterly gain. While admitted not to endure, the success was described by Doyle as one of the largest quarterly same-store sales jumps ever recorded by a major fast-food chain.[39][40]

In 2011, Domino’s launched a billboard advertising in New York's Times Square which displayed real time comments from customers, including good, neutral and bad comments.[41]

In 2015, Domino's unveiled a "pizza car" that can carry 80 pizzas, sides, 2-liter bottles of soda, and dipping sauces.[42] It also has a 140-degree oven on board and is more fuel efficient than a standard delivery car. Officially named the Domino's DXP, the car is a Chevrolet Spark customized by Roush Performance. Once each car reaches 100,000 miles, it will be retired and returned to Roush, where it will be returned to stock form.[43]

In 2016, Domino’s cooperated with Starship Technologies and applied self-driving robots to deliver pizzas in specific German and Dutch cities.[44] In 2016, Domino's in New Zealand delivered the world's first pizza delivery by unmanned aerial vehicle using the DRU Drone by Flirety.[45]

In February 2017, Domino's launched a wedding registry with gifts delivered in the form of Domino's eGift cards.[46] Customers have the option of signing up for Domino's pizza package to be served for the event.[47]

In March 2017, Domino's announced a pilot project in Dutch and German cities using delivery robots to deliver food within a one-mile radius of stores in partnership with Starship Technologies.[48]

Naming

In August 2012, Domino's Pizza changed their name to simply Domino's to emphasize their variety of non-pizza products such as chicken wings, apple pies, lasagna, and pasta. At the same time, Domino's introduced a new logo that removed the blue rectangle and text under the domino in the logo, and changed the formerly all-red domino to be blue on the side with two dots and red on the side with one dot.[49][50]

Products

A Creamy Bacon pizza from Domino's in the Netherlands

The Domino's menu varies by region. The current Domino's menu in the United States features a variety of Italian-American main and side dishes. Pizza is the primary focus, with traditional, specialty, and custom pizzas available in a variety of crust styles and toppings. In 2011, Domino's launched artisan-style pizzas. Additional entrees include pasta, bread bowls, and oven-baked sandwiches. The menu offers chicken and bread sides, as well as beverages and desserts.[51]

From its founding until the early 1990s, the menu at Domino's Pizza was kept simple relative to other fast food restaurants, to ensure efficiency of delivery.[52] Historically, Domino's menu consisted solely of one style of pizza crust in two sizes (12-inch and 16-inch), 11 toppings, and Coca-Cola as the only soft drink option.[53]

A "make line" at a Domino's

The first menu expansion occurred in 1989, with the debut of Domino's deep dish or pan pizza. Its introduction followed market research showing that 40% of pizza customers preferred thick crusts. The new product launch cost approximately $25 million, of which $15 million was spent on new sheet metal pans with perforated bottoms.[54] Domino's started testing extra-large size pizzas in early 1993, starting with the 30-slice, yard-long "The Dominator".[55]

Domino's tapped into a market trend toward bite-size foods with spicy Buffalo Chicken Kickers, as an alternative to Buffalo Wings, in August 2002. The breaded, baked, white-meat fillets, similar to chicken fingers, are packaged in a custom-designed box with two types of sauce to "heat up" and "cool down" the chicken.[56][57]

In August 2003, Domino's announced its first new pizza since January 2000, the Philly Cheese Steak Pizza. The product launch also marked the beginning of a partnership with the National Cattlemen's Beef Association, whose beef Check-Off logo appeared in related advertising.[58] Domino's continued its move toward specialty pizzas in 2006, with the introduction of its Brooklyn Style Pizza, featuring a thinner crust, cornmeal baked in to add crispness, and larger slices that could be folded in the style of traditional New York-style pizza.[59]

In 2008, Domino's once again branched out into non-pizza fare, offering oven-baked sandwiches in four styles, intended to compete with Subway's toasted submarine sandwiches. Early marketing for the sandwiches made varied references to its competition, such as offering free sandwiches to customers named "Jared," a reference to Subway's spokesman of the same name.[60]

The company introduced its American Legends line of specialty pizzas in 2009, featuring 40% more cheese than the company's regular pizzas, along with a greater variety of toppings.[61] That same year, Domino's began selling its BreadBowl Pasta entree, a lightly seasoned bread bowl baked with pasta inside, and the Lava Crunch Cake dessert, composed of a crunchy chocolate shell filled with warm fudge.[62] Domino's promoted the dessert by flying in 1,000 cakes to deliver at Hoffstadt Bluffs Visitor Center near Mount St. Helens in Washington state.[63]

In 2010, shortly after the company's 50th anniversary, Domino's changed its pizza recipe "from the crust up", making significant changes in the dough, sauce, and cheese used in their pizzas.[64] Their advertising campaign admitted to earlier problems with the public perception of Domino's product due to taste issues.[65][66]

In September 2012, Domino's announced it was going to roll out a pan pizza on September 24, 2012.[67] Following this move, the Deep Dish pizza was discontinued after 23 years of being on the menu.

In December 2013, Domino's Pizza, in Israel, unveiled its first vegan pizza, which uses a soy-based cheese substitute.[68][69]

After a stock low point in late 2009, the company's stock had risen 700 percent in the five years preceding February 2016.[70] Even as the American economy has suffered and unemployment has risen, Domino's has seen its sales rise dramatically through its efforts to rebrand and retool its pizza.[71]

Corporate governance

Domino's management is led by J. Patrick Doyle, CEO from March 2010, formerly president of Domino's USA. Previous chief executive Dave Brandon remains Chairman.[72] Among 11 executive vice presidents are Jeffrey Lawrence, CFO; Stan Gage, Team USA; Scott Hinshaw, Franchise Operations and Development; and Kenneth Rollin, General Counsel.[73] Domino's operations are overseen by a board of directors led by Brandon. Other members of the board are J. Patrick Doyle, Andy Ballard, Andrew Balson, Diana Cantor, Richard Federico, James Goldman, Bud Hamilton, and Gregory Trojan.[74]

Charitable activities

In 2001, Domino's launched a two-year national partnership with the Make-A-Wish Foundation of America. That same year, company stores in New York City and Washington, D.C. provided more than 12,000 pizzas to relief workers following the September 11 attacks on the World Trade Center and The Pentagon. Through a matching funds program, the corporation donated $350,000 to the American Red Cross' disaster relief effort.[19] In 2004, Domino's began a partnership with St. Jude Children's Research Hospital, participating in the hospital's "Thanks and Giving" campaign since the campaign began in 2004, and raising $5.2 million in 2014.[75]

Advertising

Arie Luyendyk's Lola-Chevrolet which won the 1990 Indianapolis 500 for Doug Shierson Racing

In the 1980s, Domino's was well known for its advertisements featuring the Noid. That concept was created by Group 243 Inc. who then hired Will Vinton Studios to produce the television commercials that they created. The catchphrase associated with the commercials was "Avoid the Noid." The Noid was discontinued after Kenneth Lamar Noid, believing the mascot to be an imitation of him, held two Domino's employees hostage in Chamblee, Georgia.[76] The employees escaped while Noid ate a pizza he had ordered.[77] Noid was eventually diagnosed with paranoid schizophrenia and acquitted due to insanity, and later committed suicide.[78][79] The Noid was briefly brought back for a week in 2011 in an arcade-style game on the Domino's Facebook page. The person with the top score received a coupon for a free pizza.[80]

Due to a glitch on the Domino's website, the company gave away nearly 11,000 free medium pizzas in March 2009. The company had planned the campaign for December 2008 but dropped the idea and never promoted it. The code was never deactivated, however, and resulted in the free giveaway of the pizzas across the United States after someone discovered the promotion on the website by typing in the word "bailout" as the promotion code and then shared it with others on the Internet. Domino's deactivated the code on the morning of March 31, 2009, and promised to reimburse store owners for the pizzas.[81]

Domino's sponsored CART's Doug Shierson Racing, which was driven by Arie Luyendyk and won the 1990 Indianapolis 500. In 2003, Domino's teamed up with NASCAR for a multi-year partnership to become the "Official Pizza of NASCAR."[82] Domino's also sponsored Michael Waltrip Racing and driver David Reutimann during the 2007 season in the NASCAR Sprint Cup Series.

30-minute guarantee

Starting in 1973, Domino's Pizza had a guarantee that customers would receive their pizzas within 30 minutes of placing an order or they would receive the pizzas free. The guarantee was reduced to $3 off in the mid-1980s. In 1992, the company settled a lawsuit brought by the family of an Indiana woman who had been killed by a Domino's delivery driver, paying the family $2.8 million. In another 1993 lawsuit, brought by a woman who was injured when a Domino's delivery driver ran a red light and collided with her vehicle, the woman was awarded nearly $80 million but accepted a payout of $15 million.[83] The guarantee was dropped that same year because of the "public perception of reckless driving and irresponsibility", according to then-CEO Tom Monaghan.[83]

In December 2007, Domino's introduced a new slogan, "You Got 30 Minutes," alluding to the earlier pledge but stopping short of promising delivery in half an hour.[84]

The company continues to offer the 30-minute guarantee for orders placed in its stores situated in Colombia, Vietnam, Mexico, China, and Turkey.

In Malaysia and Singapore, a refund is instead substituted with a "Free Regular Pizza Voucher".[85][86]

In India, the guarantee is for ₹300 ($5) and is valid for an order of less than four pizzas.

Franchises

Domino's Pizza World Map, with the company's 2015 footprint indicated in red

Domino's Pizza currently has locations in 85 countries. It has its stores in 5,701 cities worldwide (2,900 international and 2,800 in the US). Domino's had approximately 11,000 stores as of the first quarter of 2014, with 774 in the UK, 4,986 in the US, and 1010 in India.[87][88] In most cases, Domino's has master franchise agreements with one company per country, but three companies have acquired multiple master franchise agreements, covering multiple countries:

  • The rights to own, operate, and franchise branches of the chain in Australia, New Zealand, France, Belgium, the Netherlands, and Monaco are currently owned by Australian Domino's Pizza Enterprises, having bought the master franchises from the parent company in 1993 (Australian and New Zealand franchises) and 2006 (European franchises).
  • The master franchises for the UK and Ireland were purchased in 1993 by the British publicly listed Domino's Pizza Group (DPC), which acquired the master franchise for Germany in 2011 and Switzerland, Liechtenstein, and Luxembourg in August 2012 by buying the Swiss master franchise holder, with an option to acquire the Austrian master franchise as well.[89][90][91] DPC opened its first Swedish location near the Mobilia shopping mall in Malmö in December 2016.[92]
  • The master franchises for India, Bangladesh, Nepal, and Sri Lanka, are currently owned by the Indian company Jubilant FoodWorks. India is the largest international market for Domino's outside its home market. The company operates 1,147 stores across 264 Indian cities as of April 25, 2018.[93] Apart from the United States, India is the only country to have over 1,000 Domino's outlets. Indian pizza flavors such as paneer pizza, chicken tikka masala pizza, and kheema do pyaza pizza have been sold in other international markets.

See also

References

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