Domino's eyes expansion after new franchise deal
Domino's UK and Ireland operations are targeting £2bn (€2.41bn) of sales by 2028 from more than 1,600 stores, around 200 more than currently.
The UK and Ireland arm of pizza-maker Domino's has reached a new five-year agreement with its franchise partners, the company said on Monday, as the fast-food chain looks to expand its store network and increase investment in its digital platform.
The company’s new Profitability and Growth Framework, which it said had the "unanimous support" of its franchise partners, allows for shared investment in marketing and technology, and provides incentives for new store openings.
The London-listed pizza chain, which operates under the umbrella of US-based Domino's Pizza in the UK and Ireland, is targeting £2bn (€2.41bn) of sales by 2028 from more than 1,600 stores, around 200 more than currently.
Domino’s said it would directly contribute about £3m to £4m each year from 2025 under the deal, and invest an additional £4m to £5m a year in the cost base, including in its technology platform, cybersecurity and supply chain capacity.
"(The) incremental spend on the new franchisee framework should calm any fears of a larger reset, particularly in the wake of the budget, which will have had a disproportionately large impact on the franchisees," analysts at RBC Capital said.
The new franchise agreement will run from January 3, following the conclusion of the existing deal, said Domino’s, which in 2021 resolved a row with its franchisees over profit-sharing after more than two years of negotiations.
The company said it expects to make additional investments including for the extension of new store incentives to five years from the current three years.
Domino’s UK and Irish operations saw total orders grow 5.3% and like-for-like sales rose 2.7% in the first nine weeks of the fourth quarter.
