The Domino’s Franchise Opportunity Is Good. But You Likely Can't Own One.
The Domino’s Franchise Opportunity Is Good.
But You Likely Can't Own One.
More than 95 percent of Domino's franchisees in the United States began their careers as part-time Domino's pizza makers or delivery drivers.
Just about every single day I get an inquiry asking about if I know of a domino's for sale or what is the domino's pizza franchise cost and associated franchise fee. I get it. most everyone knows Domino's Pizza and certainly word has spread far and wide that franchise owners at domino's pizza franchise make nice livings as a franchise owner.
But where does Domino's Pizza fit in the franchise industry? What is the franchise fee? Do they have company owned stores and just how good is their proven business model?
First of all the franchise fees for Domino's Pizza franchise.
Domino's Pizza offers franchises for a fee of $25,000, the total initial investment ranges from $119,950 to $461,700. The franchise agreement lasts for 10 years and is renewable, and the royalty fee is 5.5%. Franchisees should have at least $75,000 in liquid cash available to execute the franchise business model within the guidelines of the Domino's Pizza franchise development program.
Domino's has about 330 company store restaurants around the world, and they're used as a testing ground for new products and ideas before being passed on to the franchise system retail outlets as a whole.
This is certainly a great way to run their internally based franchise system, testing new pizza innovations at appropriate shopping centers instead of via franchise locations.
Certainly Domino's pizza franchise wants to help franchise owners best utilize their liquid capital on their own franchise locations after a new product has been well proven.
History Of Domino's Pizza
Domino's began as a single pizza restaurant in Michigan in 1960, when the company was founded. The fast-food pizza chain has expanded considerably, and it's now a worldwide brand with over 17,000 franchisees in the United States and across six continents around the world.
Domino's began as a pizza shop, but they've expanded their menu considerably to include sides and appetizers like buffalo wings, breadsticks, sweets, and more.
Customers can use the Domino's app to order and track their pies, which is a huge plus. They're likewise launching customer care initiatives, such as their new "Delivery Insurance," which are popular with consumers and help to build a devoted clientele.
Domino’s franchise Opportunity Requirements?
What it takes to Own a piece of the Domino's pizza pie.
Domino's wants you to take and graduate from their internal education program. In order to be approved for a Domino's Pizza franchise, candidates must learn how to run and operate a store or supervise multiple stores - while working for Domino's.
They believe this will help candidates better understand what it takes to successfully own and operate a Domino's Pizza.
At this time, Domino's is only considering franchise candidates who have worked as general managers or supervisors for Domino's for at least one year.
This is really a unique approach in my opinion, as most franchisors do not have this type of requirement and gladly accept outside candidates and train them once they own their franchise.
But Domino's Pizza franchise is different.
How much does a Domino's owner make?
While how much Domino's franchise owners make definitely varies from location to location, Glassdoor reports the average owner draws an annual salary between $107,000 to $116,000.
That number may seem low but certainly does not take into account owners distributions and tax savings.
"Owning a single unit Domino's franchise on the surface seems like buying a job."
- Jack Johnson CEO The Franchise Insiders
At last report the average weekly sales of a Domino's franchise location was $22,045 or $1,146,340 per year.
Are there franchises that gross more $$ at similar investment ranges to Domino's that don't require working for the company for a year prior to ownership? Absolutely.
A savvy investor would want to own at least 5 Domino's franchise locations to make it a worth while investment in my opinion. And those types of investors don't have time to go to pizza academy for a year.
Is Domino's limiting themselves with their franchise strategy? I believe so.
Currently there are three types of Domino's franchise Locations.
The first type is a traditional pizza restaurant that sells pizza by the slice and also has a delivery service.
The second type is an express restaurant that only sells pizza by the slice and does not have a delivery service.
The third type is a carry-out-only restaurant that can be converted to a regular store after the market has been tested and proven.
The kind of store you want to open will affect how much it costs to start, and also where the store can be.
In Late 2021 Domino’s Pizza CEO Announces Retirement As Quarterly Sales Weakened
But perhaps the Domino’s Pizza internally trained franchise system isn't so perfect after all. Multiple stores reported a sales decline in late 2021. The company’s first in U.S. in more than a decade, as chain reduced hours and hunted for drivers.
Sales have since rebounded in Q1 of 2022. Still, as a franchise consultant with years of experience in the franchise world, I can't help but wonder if Domino's could benefit from opening up franchise opportunities to outside candidates.
Changing The Domino's Franchise Model
Would Domino’s Pizza be better served by opening up their pizza prep school to outside franchise owners who have the capital to invest in multiple locations and put managers through such training quickly?
Certainly it would be an easy adjustment to the franchise agreement and Domino's could mandate that outside franchise owners have higher net worth so they don't have to worry so much about direct or indirect financing new franchisees.
Owning a domino's pizza company franchise with their strong reputation for fast pizza delivery would attract many new high net worth outside investors who want to own a business with a strong brand, and they would certainly follow the Domino's plan for opening similar retail locations to high performing franchise owners.
It's a total win win!
CEO - The Franchise Insiders
About the author:
Jack Johnson is a leading franchise consultant. He is CEO for the franchise Insiders and has helped hundreds of people realize the dream of franchise ownership over two decades by helping them explore today's best franchises. The franchise Insiders specializes in helping clients find absentee ownership franchises but works with hundreds of other top franchises as well.