Domino's Pizza UK Announces New 5-Year Framework with Franchise Partners
Domino's Pizza Group in the UK has unveiled a new five-year framework with its franchise partners, aiming for significant store expansion and increased investments.
Domino's Pizza Group, the UK master franchise of the American pizza giant, has announced a new five-year Profitability and Growth Framework with its franchise partners. This strategic move is designed to drive long-term expansion, enhance digital investments, and sustain national value campaigns, fortifying Domino's market position despite economic challenges. The framework, which received unanimous support from franchise partners, will commence on January 3, 2025, following the conclusion of the existing Memorandum of Understanding.
The new framework aligns Domino's with its franchisees through shared investments in marketing and technology, and provides incentives for new store openings. Domino's aims to increase its store count to over 1,600 by 2028, delivering £2 billion in system sales, and to 2,000 stores by 2033, with £2.5 billion in system sales. The company plans to invest an additional £3-4 million annually to support these goals.
However, the company is also facing a £3 million annual cost hit due to recent UK Budget measures that increased employers' national insurance contributions and the national minimum wage. Despite these challenges, Domino's reported a 5.3% increase in total orders and a 2.7% rise in like-for-like sales in the first nine weeks of the fourth quarter.
Andrew Rennie, CEO of Domino's Pizza Group, expressed confidence in the new framework, stating it provides a strong platform for sustainable growth and positions the company to address future economic headwinds. Mark Millar, Chairman of the Domino's Franchise Association, highlighted the importance of the framework in providing certainty amidst significant tax increases.
The framework also includes enhanced marketing contributions, increased digital investment, and new store incentives, particularly in lower address count territories. Domino's has committed to investing in technology and cyber security, as well as enhancing its supply chain capabilities, to support its long-term growth strategy.
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