Domino’s Pizza is one of the most recognizable brands in the world. It has become a staple on streets, at sports arenas, as well as in the hearts of pizza lovers everywhere.
With its wide reputation and steady fan base, it might just be the right endeavor if you’re looking to franchise a business.
Currently, Domino’s only accepts internal franchisee candidates, meaning only individuals who have recently completed at least a year’s worth of successful management or supervisory experience within the Domino’s Pizza system can apply.
In this article, we’ll discuss everything you need to know if you’re interested in opening a Domino’s franchise.
We’ll cover the costs and requirements, as well as the training and support you’ll receive.
About The Domino’s and Franchise
Domino’s is a Michigan-based multinational pizza restaurant chain. It’s known for its speedy pizza delivery, carryout, and dine-in options.
The company was founded in 1960 and has since expanded to over 90 countries worldwide, making it one of the largest pizza chains in the world.
One thing that sets Domino’s apart from other pizza chains is its commitment to technology.
The company was one of the first to introduce online ordering and has since continued to innovate in the space.
Today, customers can order Pizza via Domino’s website, mobile app, smartwatch, or even by texting an emoji.
Overall, Domino’s is a well-respected and established brand in the pizza industry.
With its focus on technology, quality, and innovation, it’s no surprise that the company continues to thrive and expand to new markets around the world.
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Domino’s Franchise History
In 1960, two brothers, Tom and James Monaghan, purchased a small pizzeria called DomiNick’s in Ypsilanti, Michigan.
However, after only a year, James decided to sell his share of the business to Tom for a used Volkswagen Beetle that they used for deliveries.
Tom then transformed the business, expanding it to three locations and eventually changing the name to Domino’s Pizza in 1965.
Customers were drawn to the unique concept of the store, which offered delicious pizzas at affordable prices and speedy delivery services.
The success of the first few locations led to the opening of the first franchise outlet in 1967.
The franchise model proved a hit, and the brand expanded rapidly throughout Michigan and beyond. By the 1980s, Domino’s Pizza was one of the biggest names in the industry.
In 1983, the company opened its first international location in Winnipeg, Canada.
From there, they continued to expand their international presence, entering over 40 different markets and opening their 1000th international store in the 1990s.
Today, Domino’s Pizza is a thriving multinational chain with over 19,800 locations worldwide.
As one of the largest pizza chains in the world, the company is known for its commitment to technology and innovation, which has made the ordering process quicker and easier.
Domino’s Franchise Model
| Initial Investment | $145,000–$500,000 |
| Franchise | YES |
| Franchise Fee | $10,000 |
| Royalty Fee | 5.5% |
| Liquidity | $200,000 |
| Estimated Outlets | 19,800+ |
How Much Does It Cost To Open A Domino’s Franchise?
The initial investment for a Domino’s franchise ranges from $145,000–$500,000, depending on the location and size of your store.
Additionally, there is a one-time franchise fee of $10,000. This fee covers all the costs associated with setting up a new franchise, such as training and marketing.
In some cases, a $25,000 “reservation fee” may also be required. The franchise disclosure document will have additional details about the specifics of this fee.
In addition to the initial investment, prospective business owners must meet certain financial requirements.
These include a minimum net worth of $250,000 and liquid assets totaling at least $75,000.
Once you open your store and start operations, it’s important to know that Domino’s requires all its franchisees to pay ongoing royalty fees as well as marketing fees — 5.5% for royalties and 3-4% for marketing expenses.
This money goes towards developing new products or services and advertising campaigns that promote the brand worldwide.
Note that the costs don’t end there — you will also need to factor in the costs of staffing, inventory, real estate, and other operational expenses that are either one-time or recurring.
Domino’s Revenue & Profit
As of 2022, Domino’s has been generating worldwide revenue of $4.54 billion, making it one of the most successful pizza chains in the world.
In addition to its impressive revenue, the company has also been able to maintain an annual gross profit of $1.649 billion.
If you’re considering opening a Domino’s franchise, it’s important to note that the net profit margin for franchisees is about 8% of revenues, with an EBITDA margin of 12%.
This means that although the initial investment and ongoing expenses can be significant, the potential for profitability is promising.
Domino’s Franchise Requirements
Becoming a Domino’s franchisee is no small feat, and the selection process is highly competitive.
One of the main requirements is having at least one year of experience working as a supervisor or general manager in a restaurant or retail business.
This ensures that candidates have a proven track record of managing operations, handling finances, and leading teams.
Another crucial requirement is having a minimum net worth of $250,000, including liquid assets of at least $75,000.
This is essential to demonstrate financial stability and the ability to invest in a new business.
It’s important to note that Domino’s primarily considers internal franchisee candidates for their existing company-owned stores.
This means that if you’re interested in becoming a franchisee, you may need to start by working for the company as a manager or supervisor to gain the necessary experience.
Once you meet the basic requirements, you’ll need to undergo a rigorous selection process, including a background check, a personality assessment, and an interview with the company’s franchise development team.
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Domino’s Franchise Training And Support
In accordance with Domino’s preference for internal employees to become franchisees, the amount of experience an individual franchisee has within Domino’s determines both the length and kind of training that they get.
Domino’s Pizza requires its franchisees who have been with the company for up to a year to go through a pre-qualification procedure before they can receive their franchise agreement.
The “Qualified Franchisee Candidate” designation can be attained by franchisees who, after qualifying, successfully complete study tracks offered by the Franchise Management School.
Unless Domino’s specifically selects a physical site for a training program, all training programs are conducted entirely online.
In order to successfully run a franchise, it is necessary for franchisees to finish the initial training.
Depending on the needs that have been identified for a franchise, either the franchisor or the franchisee may be needed to do additional training.
Domino’s Franchise Terms Of Agreement & Renewal
The initial term of a Domino’s franchise agreement is 10 years, during which the franchisee is granted the right to use Domino’s brand name, trademarks, and operating systems.
At the end of the initial 10-year term, the franchisee can renew their agreement for another 10 years by meeting specific requirements set by the franchisor.
The renewal requirements include adherence to the franchise’s operating standards, payment of all royalties and fees, and completing any necessary renovations or upgrades to the store.
It’s worth noting that the terms of the renewal agreement may vary from the initial agreement in terms of fees, royalties, and other associated costs.
However, the franchisor will provide detailed information about the renewal terms in the franchise disclosure document.
Domino’s Franchise Obligations And Restrictions
When signing a Domino’s Pizza franchise agreement, it is important to be aware of the obligations and restrictions that come with being a franchisee.
One of the most important obligations is that all store locations must follow Domino’s strict guidelines for quality control, which include using fresh ingredients, maintaining cleanliness standards in the kitchen and restaurant areas, and adhering to the brand’s signature recipes.
In addition, the franchisee or controlling person must always be on-site to manage the store.
The franchisee or controlling person is required to spend all of their time managing the shop or overseeing other stores (or other relevant endeavors that the franchisor has authorized). Absentee ownership is not allowed.
All items on the menu must be available for takeout and delivery from the store, and franchisees must sell all products mandated by the franchisor.
Franchisees are not permitted to sell any unapproved products. The authorized products and services can occasionally change depending on the franchisor.
Domino’s Franchise Financial Assistance
Domino’s franchise does not offer direct or indirect financing to prospective franchisees. However, prospective franchisees can consider third-party lenders to provide financing.
Third-party lenders may be able to finance up to 80 percent of the total investment required to open a Domino’s store.
Prospective franchisees should also consider leveraging their own personal assets, such as 401(k)s, home equity loans, and other sources of capital.
Domino’s Comparison
| Company | Domino’s | Marco’s Pizza |
|---|---|---|
| Year Founded | 1960 | 1978 |
| Franchise Fee | $10,000 | $25,000 |
| Initial Investment | $145,000–$500,000 | $242,142–$633,109 |
| Number of Outlets | 19,800+ | 1,100+ |
Conclusion
Domino’s has established itself as one of the world’s largest and most renowned pizza chains.
It is an excellent opportunity for anyone interested in owning their own business, and with support from Domino’s team of corporate and field staff, it can be a highly rewarding experience.
By understanding the franchise requirements, obligations, and restrictions that come with running a Domino’s franchise, prospective franchisees can determine if they are a good fit for the Domino’s business model.
FAQs
Does Domino's Offer Franchising?
Yes, Domino’s offers franchising opportunities in many countries. However, the chain only accepts internal franchisee candidates who meet the company’s criteria for ownership.
Who Founded Domino's?
Domino’s Pizza was founded in 1960 by brothers Tom and James Monaghan in Ypsilanti, Michigan.
How Many Domino's Locations Are There?
As of 2023, there are over 19,800 Domino’s locations in more than 90 countries around the world.
Is Opening A Domino's Franchise Worth It?
Yes. With a 12% EBITDA margin and strong brand recognition, owning a Domino’s franchise can be extremely rewarding.
Amit Gupta is the founder of DrFranchises – a digital marketing agency that helps brands rank better on Google Maps through local SEO strategies. Amit has over 11 years of experience in digital marketing, SEO, email marketing, and social media marketing. He’s also the owner of multiple franchises and has helped countless brands achieve success online. When he’s not working, Amit can be found playing with his dog.