Domino's Pizza UK & IRL
Encyclopedia
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
of international fast food
Fast food
Fast food is the term given to food that can be prepared and served very quickly. While any meal with low preparation time can be considered to be fast food, typically the term refers to food sold in a restaurant or store with preheated or precooked ingredients, and served to the customer in a...
pizza delivery
Pizza delivery
Pizza delivery is a service in which a pizzeria delivers a pizza to a customer. Delivery is normally made with an automobile, motor scooter, or bicycle.- Ordering :...
chain Domino's Pizza
Domino's Pizza
Domino's Pizza, Inc. is an international pizza delivery corporation headquartered in Ann Arbor, Michigan, United States of America. Founded in 1960, Domino's is the second-largest pizza chain in the United States and has over 9,000 corporate and franchised stores in 60 countries and all 50 U.S....
. Through its subsidiary Domino's Pizza Group, the company holds the exclusive right to own, operate and in turn franchise branches of the chain in the United Kingdom and Ireland
Republic of Ireland
Ireland , described as the Republic of Ireland , is a sovereign state in Europe occupying approximately five-sixths of the island of the same name. Its capital is Dublin. Ireland, which had a population of 4.58 million in 2011, is a constitutional republic governed as a parliamentary democracy,...
. The firm's shares are listed on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
and are a constituent of the FTSE 250 Index
FTSE 250 Index
The FTSE 250 Index is a capitalisation-weighted index consisting of the 101st to the 350th largest companies on the London Stock Exchange. Promotions to and demotions from the index take place quarterly in March, June, September and December...
as of June 2008.
History
The Domino's Pizza company was founded in 1960 by American entrepreneur Tom MonaghanTom Monaghan
Thomas Stephen "Tom" Monaghan is an entrepreneur and Catholic philanthropist and activist who founded Domino's Pizza in 1960. He owned the Detroit Tigers from 1983-1992....
as a single pizzeria in Ypsilanti, Michigan
Ypsilanti, Michigan
Ypsilanti is a city in Washtenaw County in the U.S. state of Michigan. As of the 2000 census, the city population was 22,362. The city is bounded to the north by the Charter Township of Superior and on the west, south, and east by the Charter Township of Ypsilanti...
. Through franchising
Franchising
Franchising is the practice of using another firm's successful business model. The word 'franchise' is of anglo-French derivation - from franc- meaning free, and is used both as a noun and as a verb....
, the firm had opened 200 American locations by 1978. The first British branch opened in Luton
Luton
Luton is a large town and unitary authority of Bedfordshire, England, 30 miles north of London. Luton and its near neighbours, Dunstable and Houghton Regis, form the Luton/Dunstable Urban Area with a population of about 250,000....
in 1985, with expansion into Ireland following six years later. The master franchise for the British Isles was sold off by the parent company in 1993 to Domino's Pizza Group, a subsidiary
Subsidiary
A subsidiary company, subsidiary, or daughter company is a company that is completely or partly owned and wholly controlled by another company that owns more than half of the subsidiary's stock. The subsidiary can be a company, corporation, or limited liability company. In some cases it is a...
of the International Franchise Systems holding company
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
controlled by sibling investors Colin and Gerry Halpern.
The company partially floated its shares
Initial public offering
An initial public offering or stock market launch, is the first sale of stock by a private company to the public. It can be used by either small or large companies to raise expansion capital and become publicly traded enterprises...
on London's Alternative Investment Market
Alternative Investment Market
AIM is a sub-market of the London Stock Exchange, allowing smaller companies to float shares with a more flexible regulatory system than is applicable to the main market....
in 1999, by which time it had expanded to a network of almost 200 branches (of which all but eight were franchises). Certain investors such as Colin Halpern and property entrepreneur Nigel Wray retained significant stakes at this time. The company opened its 400th store in Wadsley Bridge
Wadsley Bridge
Wadsley Bridge is a suburb of Sheffield 3 mi northwest of the city centre. The area is a mixture of residential housing and small industrial and commercial premises.-Etymology:...
, Sheffield
Sheffield
Sheffield is a city and metropolitan borough of South Yorkshire, England. Its name derives from the River Sheaf, which runs through the city. Historically a part of the West Riding of Yorkshire, and with some of its southern suburbs annexed from Derbyshire, the city has grown from its largely...
in November 2005, with the 500th following in late 2007.
The Domino's share transferred from AIM to the main market of the London Stock Exchange in May 2008, and was promptly added to the FTSE 250 Index
FTSE 250 Index
The FTSE 250 Index is a capitalisation-weighted index consisting of the 101st to the 350th largest companies on the London Stock Exchange. Promotions to and demotions from the index take place quarterly in March, June, September and December...
at the next quarterly review the following month.
Operations
At the end of 2008 there were 553 branches of Domino's Pizza in the UK and Ireland, of which only one was wholly owned by the parent company. The greatest concentration of stores is found in the south of the UK, with over 175 outlets in Greater LondonGreater London
Greater London is the top-level administrative division of England covering London. It was created in 1965 and spans the City of London, including Middle Temple and Inner Temple, and the 32 London boroughs. This territory is coterminate with the London Government Office Region and the London...
and South East England
South East England
South East England is one of the nine official regions of England, designated in 1994 and adopted for statistical purposes in 1999. It consists of Berkshire, Buckinghamshire, East Sussex, Hampshire, Isle of Wight, Kent, Oxfordshire, Surrey and West Sussex...
. The chain has branches located in all nine regions of England
Regions of England
In England, the region is the highest tier of sub-national division used by central Government. Between 1994 and 2011, the nine regions had an administrative role in the implementation of UK Government policy, and as the areas covered by elected bodies...
, as well as Wales, Scotland, Northern Ireland
Northern Ireland
Northern Ireland is one of the four countries of the United Kingdom. Situated in the north-east of the island of Ireland, it shares a border with the Republic of Ireland to the south and west...
and the Republic. An ultimate total of around 1,000 branches across the region is targeted by the company.
Prospective franchisees are required to pay approximately £250,000 to the parent company for the right to operate their own Domino's Pizza outlet. Once established, the group also provides other services for the franchisee including production of dough
Dough
Dough is a paste made out of any cereals or leguminous crops by mixing flour with a small amount of water and/or other liquid. This process is a precursor to making a wide variety of foodstuffs, particularly breads and bread-based items , flatbreads, noodles, pastry, and similar items)...
, sourcing and delivery of ingredient
Ingredient
An ingredient is a substance that forms part of a mixture . For example, in cooking, recipes specify which ingredients are used to prepare a specific dish. Many commercial products contain a secret ingredient that is purported to make them better than competing products...
s and training
Training
The term training refers to the acquisition of knowledge, skills, and competencies as a result of the teaching of vocational or practical skills and knowledge that relate to specific useful competencies. It forms the core of apprenticeships and provides the backbone of content at institutes of...
. The group also delivers IT
Information technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
, advertising
Advertising
Advertising is a form of communication used to persuade an audience to take some action with respect to products, ideas, or services. Most commonly, the desired result is to drive consumer behavior with respect to a commercial offering, although political and ideological advertising is also common...
and other administrative services on behalf of the franchisees.
Financial information
| Revenue Revenue In business, revenue is income that a company receives from its normal business activities, usually from the sale of goods and services to customers. In many countries, such as the United Kingdom, revenue is referred to as turnover.... (£ million) |
EBIT Earnings before interest and taxes In accounting and finance, earnings before interest and taxes is a measure of a firm's profit that excludes interest and income tax expenses. Operating income is the difference between operating revenues and operating expenses... (£m) |
Net profit Net income Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings... (£m) |
Earnings per share Earnings per share Earnings per share is the amount of earnings per each outstanding share of a company's stock.In the United States, the Financial Accounting Standards Board requires companies' income statements to report EPS for each of the major categories of the income statement: continuing operations,... (p) |
|
|---|---|---|---|---|
| 2010 | 188.6 | 38.0 | 24.1 | 17.4 |
| 2009 | 155.0 | 30.0 | 33.6 | 13.8 |
| 2008 | 136.0 | 22.5 | 15.7 | 10.9 |
| 2007 | 114.9 | 18.3 | 13.2 | 8.4 |
| 2006 | 95.0 | 13.7 | 10.0 | 6.2 |
| 2005 | 81.7 | 10.4 | 8.3 | 5.1 |
| 2004 | 74.2 | 9.1 | 6.7 | 4.1 |
| 2003 | 61.6 | 6.0 | 4.6 | 2.8 |
- - Accounts to 2005 prepared according to United Kingdom Generally Accepted Accounting PrinciplesGenerally Accepted Accounting PrinciplesGenerally Accepted Accounting Principles refer to the standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as accounting standards...
. Accounts from 2006 onwards prepared according to International Financial Reporting StandardsInternational Financial Reporting StandardsInternational Financial Reporting Standards are principles-based standards, interpretations and the framework adopted by the International Accounting Standards Board ....
.
Shareholder structure
As of 29 January 2010, many of the principal shareholderShareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
s of Domino's Pizza UK & IRL are individuals connected with the company: long-term investor and non-executive director
Non-executive director
A non-executive director or outside director is a member of the board of directors of a company who does not form part of the executive management team. He or she is not an employee of the company or affiliated with it in any other way...
Nigel Wray holds a 15.6% stake, while former owner Colin Halpern retains 3.1%. Major franchiser Moonpal Singh Grewal holds 6.9% and executive
Executive director
Executive director is a term sometimes applied to the chief executive officer or managing director of an organization, company, or corporation. It is widely used in North American non-profit organizations, though in recent decades many U.S. nonprofits have adopted the title "President/CEO"...
chairman Stephen Hemsley owns 2.5%. Institutional shareholders include Capital Group (5.4%), Barclays Stockbrokers (5.2%), Standard Life Investments
Standard Life
Standard Life plc is a long term savings and investment business, with headquarters in Edinburgh and operations across the globe. It has 1.5 million shareholders in more than 50 countries and over 6 million customers.-History:...
(5.1%), BlackRock
BlackRock
BlackRock, Inc. is an American multinational investment management corporation and the world's largest asset manager. BlackRock is headquartered in Manhattan, New York City, New York, United States and is the leading provider of investment, advisory, and risk management solutions...
(3.4%) and Legal & General Investment Management
Legal & General
Legal & General Group Plc , commonly known as Legal & General, is a multinational financial services company headquartered in London, United Kingdom. Its products include life insurance, general insurance, pensions and investments. It has operations in the United Kingdom, Egypt, France, Germany,...
(3.2%). A further 3.5% of shares are held in treasury stock
Treasury stock
A treasury stock or reacquired stock is stock which is bought back by the issuing company, reducing the amount of outstanding stock on the open market ....
by the Domino's Pizza UK & IRL plc Employee Benefit Trust.
Labour issues
In 2007 the current affairs programme NewsnightNewsnight
Newsnight is a BBC Television current affairs programme noted for its in-depth analysis and often robust cross-examination of senior politicians. Jeremy Paxman has been its main presenter for over two decades....
reported on the alleged poor treatment of Domino's Pizza employees. Workers at one franchise claimed to be victims of "modern day slavery", according to union T&G Unite, with money unlawfully deducted from the workers' pay sometimes leaving workers being paid nothing or even made to pay the company. Some of the deductions made by the company included the costs of insuring the cars used to deliver pizzas, and one worker was deducted all her wages for the first week of work because the franchise designated it "unpaid training". Then-CEO
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of the company Stephen Hemsley denied, however, that such issues were systemic within the franchise network.
Sponsorship
Domino's Pizza was the sponsor of episodes of The SimpsonsThe Simpsons
The Simpsons is an American animated sitcom created by Matt Groening for the Fox Broadcasting Company. The series is a satirical parody of a middle class American lifestyle epitomized by its family of the same name, which consists of Homer, Marge, Bart, Lisa and Maggie...
on Sky1 between 1998 and 2008. In 2007, Ofcom
Ofcom
Ofcom is the government-approved regulatory authority for the broadcasting and telecommunications industries in the United Kingdom. Ofcom was initially established by the Office of Communications Act 2002. It received its full authority from the Communications Act 2003...
introduced a ban on fast food advertising
Fast food advertising
Fast food advertising is the promotion of fast food products and ventures through a variety of media. Fast food advertising campaigns are not as highly regulated as some other products, such as those imposed on alcohol advertising, but there are often public calls for their promotion to be...
around programmes aimed at under sixteens, so the advertising was dropped for a brief period but later resumed. The advertising subsequently became more brand focused, rather than promoting specific products. In October 2008, the company announced that its sponsorship of the show would come to an end. The firm has also sponsored episodes of The Simpsons on Channel 4
Channel 4
Channel 4 is a British public-service television broadcaster which began working on 2 November 1982. Although largely commercially self-funded, it is ultimately publicly owned; originally a subsidiary of the Independent Broadcasting Authority , the station is now owned and operated by the Channel...
(which were previously sponsored by Pizza Hut
Pizza Hut
Pizza Hut is an American restaurant chain and international franchise that offers different styles of pizza along with side dishes including pasta, buffalo wings, breadsticks, and garlic bread....
). In 2006, Domino's launched products based on the show such as the "Homer's Hot Stuff" pizza, along with TV advertising featuring the characters.
Domino's has also sponsored the first four series of Britain's Got Talent
Britain's Got Talent
Britain's Got Talent is a British television talent show competition which started in June 2007 and originated from the Got Talent series. The show is produced by FremantleMedia's TalkbackThames and Simon Cowell's production company SYCOtv. The show is broadcast on ITV in Britain and TV3 in Ireland...
. Orders received on the night of the 2008 final were around a third above those of a typical Saturday night.
Digital strategy
In 2007 Domino's became the first pizza company in the UK to launch a service that allows customers to order pizzas by text message. In 2010, it launched a widget for social network sites, allowing any user with a blog, FacebookFacebook
Facebook is a social networking service and website launched in February 2004, operated and privately owned by Facebook, Inc. , Facebook has more than 800 million active users. Users must register before using the site, after which they may create a personal profile, add other users as...
or MySpace
MySpace
Myspace is a social networking service owned by Specific Media LLC and pop star Justin Timberlake. Myspace launched in August 2003 and is headquartered in Beverly Hills, California. In August 2011, Myspace had 33.1 million unique U.S. visitors....
account to promote Domino’s Pizza and receive a cash reward every time an order is placed through the widget.