Domino's Pizza

Domino's Pizza Inc.
Domino's
Public
Traded as NYSE: DPZ
Industry Pizzerias
Founded June 10, 1960 (1960-06-10)
Ypsilanti, Michigan, U.S.
Founders Tom Monaghan
James Monaghan
Headquarters Domino Farms Office Park
Ann Arbor Charter Township, Michigan, United States
Area served
 Worldwide
Key people
 Tom Monaghan, Founder
J. Patrick Doyle, CEO
Products Italian-American cuisine, Pizza, pasta, chicken wings, submarine sandwiches, wraps, desserts
Revenue Increase $2.2165 billion USD (2016)[1][2]
$405.4 million USD (2015)[1][2]
$306.2 million (2015)[1][2]
Number of employees
 260,000 (2015)[2]
Website www.dominos.com/en/

Domino's Pizza Inc. is an American pizza restaurant chain and international franchise pizza delivery corporation headquartered at the Domino Farms Office Park (the campus being owned by Domino's Pizza co-founder Tom Monaghan) in Ann Arbor Charter Township, Michigan, United States, near Ann Arbor, Michigan. Founded in the United States in 1960, Domino's is in 81 countries, making it the second-largest franchised pizza chain after Pizza Hut.

History

1960s-1990s

In 1960, Tom Monaghan and his brother, James, purchased DomiNick's, a small pizza store in Ypsilanti, Michigan, near Eastern Michigan University.[3] The deal was secured by a $500 down payment, and the brothers borrowed $900 to pay for the store.[4] The brothers planned to split the work hours evenly, but James didn't want to quit his job as a full-time postman to keep up with the demands of the new business. Within eight months, James traded his half of the business to Tom for the Volkswagen Beetle they used for pizza deliveries.[4] By 1965, Tom Monaghan had purchased two additional pizzerias; he now had a total of three locations in the same county. Monaghan wanted the stores to share the same branding, but the original owner forbade him from using the DomiNick's name. One day an employee returned from a pizza delivery and suggested the name Domino's. Monaghan immediately loved the idea and officially renamed the business Domino's Pizza, Inc. in 1965.[4]

The company logo originally had three dots, representing the three stores in 1965.[4] Monaghan planned to add a new dot with the addition of every new store, but this idea quickly faded, as Domino's experienced rapid growth.[4] Domino's Pizza opened its first franchise location in 1967[5] and by 1978 the company expanded to 200 stores.[6] In 1975, Domino's faced a lawsuit by Amstar Corporation, the maker of Domino Sugar, alleging trademark infringement and unfair competition. On May 2, 1980, the Fifth Circuit Court of Appeals in New Orleans found in favor of Domino's Pizza.[7]

International expansion

Dominos Pizza in Tuxtla Gutiérrez, Chiapas, Mexico.
Domino's outlet in Himayatnagar, Hyderabad, Telangana, India.

On May 12, 1983, Domino's opened its first international store, in Winnipeg, Manitoba, Canada.[8] That same year, Domino's opened its 1,000th store overall. In 1985, they opened their first store in the United Kingdom in Luton.[9] Also in 1985, Domino's opened their first store in Tokyo, Japan. In 1993, they became the second American franchise to open in the Dominican Republic and the first one to open in Haiti, under the direction of entrepreneur Luis de Jesús Rodríguez.[10] By 1995, Domino's had expanded to 1,000 international locations. In 1997, Domino's opened its 1,500th international location, opening seven stores in one day across five continents.[11] As of February 11, 2016, Domino's operates 1004 stores across 230 cities in India.[12] By 2014 the company had grown to 6,000 international locations and was planning to expand to pizza's birthplace, Italy; this was achieved on October 5, 2015 in Milan with the first restaurant. CEO Patrick Doyle in May 2014 said the company would concentrate on its delivery model there.[13]

China

Domino's Pizza chose to use its traditional delivery-based business model in China, neither altering its flavors nor reducing the sizes of pizzas,[14] and promising a 30-minute delivery time.[15] The delivery time promise failed due to Chinese automobile traffic patterns stymieing the delivery operations.[15] The large pizza sizes prevented Chinese people from using knives and forks to eat them,[14] and takeout services were unpopular with Chinese people due to cultural reasons.[16] Savio S. Chan (Chinese: 陳少宏; pinyin: Chén Shàohóng) and Michael Zakkour, authors of China's Super Consumers: What 1 Billion Customers Want and How to Sell it to Them, wrote that Domino's "failed miserably" in its strategy,[15] resulting in the company being "basically" irrelevant in China, with 40 restaurants as of 2014.[14] By January 2014 the company introduced small restaurants in the China market. Jamie Fullerton of Vice stated that these restaurants served "solid, mildly overpriced pizzas" and did not have unique to China menu items.[17]

Sale

In 1998, after 38 years of ownership, Domino's founder Tom Monaghan announced his retirement, sold 93 percent of the company to Bain Capital, Inc. for about $1 billion, and ceased being involved in day-to-day operations of the company.[18] A year later, the company named David A. Brandon as its CEO.[19]

Present

Domino's Pizza logo used from 1996 until September 2012 in major English-speaking countries, and still use in many others

In 2004, after 44 years as a privately held company, Domino's began trading common stock on the New York Stock Exchange under the ticker symbol "DPZ".[20] Industry trade publication Pizza Today magazine named Domino's Pizza "Chain of the Year" in 2003, 2010, and 2011.[21][22][23] In a simultaneous celebration in January 2006, Domino's opened its 5,000th U.S. store in Huntley, Illinois, and its 3,000th international store in Panama City, Panama making 8,000 total stores for the system.[24] In August 2006, the Domino's location in Tallaght, Dublin, Ireland, became the first store in Domino's history to hit a turnover of $3 million (€2.35 million) per year.[25] As of September 2006, Domino's has 8,200+ stores worldwide, which totaled $1.4 billion in gross income.[26]

Innovations

In 2007, Domino's introduced its Veterans Delivering the Dream franchising program and also rolled out its online and mobile ordering sites.[6] In 2008, Domino's introduced the Pizza Tracker, an online application that allows customers to view the status of their order in a simulated "real time" progress bar.[27] The first Domino's with a dining room opened in Stephenville, Texas, giving the customers the option to either eat in or take their pizza home. Since 2005, the voice of Domino's Pizza's US phone ordering service has been Kevin Railsback.[28]

In a 2009 survey of consumer taste preferences among national chains by Brand Keys, Domino's was last — tied with Chuck E. Cheese's. In December that year, Domino's announced plans to entirely reinvent its pizza. It began a self-critical ad campaign in which consumers were filmed criticizing the then-current pizza's quality and chefs were shown developing a new pizza.[29][30] The new pizza was unveiled that same month. The following year, 2010 and Domino's 50th anniversary, the company hired J. Patrick Doyle as its new CEO and experienced a 14.3% quarterly gain. While admitted not to endure, the success was described by Doyle as one of the largest quarterly same-store sales jumps ever recorded by a major fast-food chain.[31][32]

In 2015, Dominos unveiled a special "pizza car" that can carry 80 pizzas, sides, 2-liter bottles of soda and dipping sauces.[33] It also has a 140-degree oven on board and is more fuel efficient than a standard delivery car. Officially named the DXP, the car is built on the Chevy Spark platform and each car will be retired once it hits 100,000 miles.[34]

In 2016, Domino's in New Zealand delivered the world's first pizza delivery by unmanned aerial vehicle using the DRU Drone by Flirety.[35]

Naming

In August 2012, Domino's Pizza changed their name to simply Domino's to emphasize their variety of non-pizza product such as chicken wings, apple pies, lasagna and pasta. At the same time, Domino's introduced a new logo that removed the blue rectangle and text under the domino in the logo, and changed the formerly all-red domino to be blue on the side with two dots and red on the side with one dot.[36][37]

Products

Domino's Pizza (Malaysia), Chicken Pepperoni, New York Crust.

The Domino's menu varies by region. The current Domino's menu in the United States features a variety of Italian-American entrees and side dishes. Pizza is the primary focus, with traditional, specialty, and custom pizzas available in a variety of crust styles and toppings. In 2011, Domino's launched artisan-style pizzas. Additional entrees include pasta, bread bowls, and oven-baked sandwiches. The menu offers chicken side dishes, breadsticks, as well as beverages and desserts.[38]

From its founding until the early 1990s, the menu at Domino's Pizza was kept simple relative to other fast food restaurants, to ensure efficiency of delivery.[39] Historically, Domino's menu consisted solely of one pizza in two sizes (12-inch and 16-inch), 11 toppings, and Coca-Cola as the only soft drink option.[40]

A "make line" at a Domino's

The first menu expansion occurred in 1989, with the debut of Domino's deep dish or pan pizza. Its introduction followed market research showing that 40% of pizza customers preferred thick crusts. The new product launch cost approximately $25 million, of which $15 million was spent on new sheet metal pans with perforated bottoms.[41] Domino's started testing extra-large size pizzas in early 1993, starting with the 30-slice, yard-long "The Dominator".[42]

Domino's tapped into a market trend toward bite-size foods with spicy Buffalo Chicken Kickers, as an alternative to Buffalo Wings, in August 2002. The breaded, baked, white-meat fillets, similar to chicken fingers, are packaged in a custom-designed box with two types of sauce to "heat up" and "cool down" the chicken.[43][44]

In August 2003, Domino's announced its first new pizza since January 2000, the Philly Cheese Steak Pizza. The product launch also marked the beginning of a partnership with the National Cattlemen's Beef Association, whose beef Check-Off logo appeared in related advertising.[45] Domino's continued its move toward specialty pizzas in 2006, with the introduction of its Brooklyn Style Pizza, featuring a thinner crust, cornmeal baked in to add crispness, and larger slices that could be folded in the style of traditional New York-style pizza.[46]

In 2008, Domino's once again branched out into non-pizza fare, offering oven-baked sandwiches in four styles, intended to compete with Subway's toasted submarine sandwiches. Early marketing for the sandwiches made varied references to its competition, such as offering free sandwiches to customers named "Jared," a reference to Subway's spokesman of the same name.[47]

The company introduced its American Legends line of specialty pizzas in 2009, featuring 40% more cheese than the company's regular pizzas, along with a greater variety of toppings.[48] That same year, Domino's began selling its BreadBowl Pasta entree, a lightly seasoned bread bowl baked with pasta inside, and the Lava Crunch Cake dessert, composed of a crunchy chocolate shell filled with warm fudge.[49] Domino's promoted the dessert by flying in 1,000 cakes to deliver at Hoffstadt Bluffs Visitor Center near Mount St Helens in Washington State.[50]

In 2010, shortly after the company's 50th anniversary, Domino's changed its pizza recipe "from the crust up", making significant changes in the dough, sauce, and cheese used in their pizzas.[51] Their advertising campaign admitted to earlier problems with the public perception of Domino's product due to taste issues.[52][53]

In September 2012, Domino's announced it was going to roll out a pan pizza on September 24, 2012.[54] Following this move, the Deep Dish pizza was discontinued after 23 years of being on the menu.

In December 2013, Domino's Pizza, in Israel, unveiled its first vegan pizza, which uses a soy-based cheese substitute.[55][56]

After a stock low point in late 2009, the company's stock had risen 700 percent in the five years preceding February 2016.[57] Even as the American economy has suffered and unemployment has risen, Domino's has seen its sales rise dramatically through its efforts to rebrand and retool its pizza.[58]

In 2014 Domino's Pizza in Nigeria introduced the new Jollof Rice Pizza and The Beef Stew Pizza.

Beverages

Domino's serves Coca-Cola products and is the only "Big Four" pizza chain to do so. Rivals Papa John's Pizza and Little Caesars sold Coca-Cola in the past, but both switched to Pepsi, in 2012 and 2007, respectively. Pizza Hut, due to its previous ownership by PepsiCo, has a lifetime contract to sell Pepsi products. Domino's Pizza in Mexico switched to Pepsi in November 2012 and Domino's Pizza in Malaysia, Pakistan, Spain, New Zealand and Taiwan are with Pepsi as well.

Corporate governance

Domino's management is led by J. Patrick Doyle, CEO from March 2010, formerly president of Domino's USA. Previous chief executive David Brandon remains chairman.[59] Among 11 executive vice presidents are Jeffrey Lawrence, CFO; Stan Gage, Team USA; Scott Hinshaw, Franchise Operations and Development; and Kenneth Rollin, General Counsel.[60] Domino's operations are overseen by a board of directors led by Brandon. Other members of the board are J. Patrick Doyle, Andy Ballard, Andrew Balson, Diana Cantor, Richard Federico, James Goldman, Bud Hamilton and Gregory Trojan.[61]

Charitable activities

In 2001, Domino's launched a two-year national partnership with the Make-A-Wish Foundation of America. That same year, company stores in New York City and Washington D.C. provided more than 12,000 pizzas to relief workers following the September 11 attacks on the World Trade Center and The Pentagon. Through a matching funds program, the corporation donated $350,000 to the American Red Cross' disaster relief effort.[11] In 2004, Domino's began a partnership with St. Jude Children's Research Hospital, participating in the hospital's "Thanks and Giving" campaign since the campaign began in 2004, and raising $5.2 million in 2014.[62]

Advertising

Arie Luyendyk's Lola-Chevrolet which won the 1990 Indianapolis 500 for Doug Shierson Racing.

In the 1980s, Domino's was well known for its advertisements featuring the Noid. That concept was created by Group 243 Inc. who then hired Will Vinton Studios to produce the television commercials that they created. The catchphrase associated with the commercials was "Avoid the Noid."

Due to a glitch on the Domino's website, the company gave away nearly 11,000 free medium pizzas in March 2009. The company had planned the campaign for December 2008 but dropped the idea and never promoted it. The code was never deactivated, however, and resulted in the free giveaway of the pizzas across the United States after someone discovered the promotion on the website by typing in the word "bailout" as the promotion code and then shared it with others on the Internet. Domino's deactivated the code on the morning of March 31, 2009 and promised to reimburse store owners for the pizzas.[63]

Domino's sponsored CART's Doug Shierson Racing, which was driven by Arie Luyendyk and won the 1990 Indianapolis 500. In 2003, Domino's teamed up with NASCAR for a multi-year partnership to become the "Official Pizza of NASCAR."[64] Domino's also sponsored Michael Waltrip Racing and driver David Reutimann during the 2007 season in the NASCAR Sprint Cup Series.

30-minute guarantee

Starting in 1973, Domino's Pizza had a guarantee that customers would receive their pizzas within 30 minutes of placing an order or they would receive the pizzas free. The guarantee was reduced to $3 off in the mid-1980s. In 1992, the company settled a lawsuit brought by the family of an Indiana woman who had been killed by a Domino's delivery driver, paying the family $2.8 million. In another 1993 lawsuit, brought by a woman who was injured when a Domino's delivery driver ran a red light and collided with her vehicle, the woman was awarded nearly $80 million, but accepted a payout of $15 million.[65] The guarantee was dropped that same year because of the "public perception of reckless driving and irresponsibility", according to then-CEO Tom Monaghan.[65]

In December 2007, Domino's introduced a new slogan, "You Got 30 Minutes," alluding to the earlier pledge but stopping short of promising delivery in half an hour.[66]

The company continues to offer the 30 minute guarantee for orders placed in its stores situated in Colombia, India, Vietnam, Mexico, China and Turkey.

In Malaysia and Singapore, a refund is instead substituted with a "Free Regular Pizza Voucher".[67][68]

In India, the guarantee is for ₹300 ($5) and is valid for an order of less than 4 pizzas.

Franchises

Domino's Pizza World Map

Domino's Pizza currently has locations in 74 countries. It has its stores in 5,701 cities worldwide (2,900 international and 2,800 in the US). Domino's had approximately 11,000 stores as of the first quarter of 2014, with 774 in the UK, 4,986 in the US, and 1010 in India.[69][70] In most cases, Domino's has master franchise agreements with one company per country, but three companies have acquired multiple master franchise agreements, covering multiple countries:

See also

References

  1. 1 2 3 "Domino's Pizza Inc. financial statements". Reuters. Retrieved March 6, 2016.
  2. 1 2 3 4 Domino's Pizza, Inc. 2015 10-K, Domino's Pizza, Inc., May 21, 2016
  3. ↑ Boyer, Peter J. (February 19, 2007). "The Deliverer". The New Yorker. Retrieved August 31, 2009.
  4. 1 2 3 4 5 Sloane, Julie, and Tom Monaghan. "Tom Monaghan Domino's Pizza." CNNMoney. Cable News Network, 01 Sept. 2003. Web. 15 Oct. 2014. <http://money.cnn.com/magazines/fsb/fsb_archive/2003/09/01/350799/>.
  5. ↑ Domino's Pizza Inc. "Domino's Pizza Restaurants." Domino's Pizza. N.p., n.d. Web. 15 Oct. 2014. <http://www.dominos.com/about-pizza/pizza-restaurant/>.
  6. 1 2 "Domino's Pizza, Inc.". Datamonitor Company Profiles. Datamonitor. November 12, 2008. Retrieved August 31, 2009.
  7. ↑ "AMSTAR CORPORATION, Plaintiff-Appellee, v. DOMINO'S PIZZA, INC. and Atlanta Pizza, Inc., Pizza Enterprises, Inc. and Pizza Services, Inc., Hanna Creative Enterprises, Inc., Defendants-Appellants.". United States Court of Appeals for the Fifth Circuit. May 2, 1980. Archived from the original on September 8, 2008. Retrieved August 31, 2009.
  8. ↑ "Domino's Pizza delivers 100th store". The Toronto Star. May 27, 1988. The opening coincides with the fifth anniversary of Domino's Pizza of Canada, which established its first outlet in Winnipeg on May 13, 1983.
  9. ↑ "Twitter: Domino's UK: Our first store was opened in Luton in 1985". Twitter. 2012. Retrieved September 19, 2012.
  10. ↑ Santos, Miguelina (31 January 2014). "¡Ahora en Novo Centro! Domino's Pizza extiende concepto Bistro en RD". Sociales y Turismo. Retrieved 17 March 2016.
  11. 1 2 "Our Heritage". Domino's Pizza, Inc. 2008. Archived from the original on April 16, 2009. Retrieved August 31, 2009.
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  13. ↑ "CEO hopes Domino brand pizza will be a hit in Italy". The Italy News.Net. Retrieved May 19, 2014.
  14. 1 2 3 Chan, Savio and Michael Zakhour. China's Super Consumers: What 1 Billion Customers Want and How to Sell it to Them. John Wiley & Sons, 2014. Online: p. 97. ISBN 1118834747, 9781118834749. -- print: ISBN 978-1-118-83474-9 p. 97 ("The Great Pizza Wars: In China, Everything Is Possible, but Nothing Is Easy", start p. 96, in Chapter 12: The China Market + The China Global Demographic = China's Super Consumers)
  15. 1 2 3 Chan, Savio and Michael Zakhour. China's Super Consumers: What 1 Billion Customers Want and How to Sell it to Them. John Wiley & Sons, 2014. Online: p. 96. ISBN 1118834747, 9781118834749. -- print: ISBN 978-1-118-83474-9 p. 96. ("The Great Pizza Wars: In China, Everything Is Possible, but Nothing Is Easy", start p. 96, in Chapter 12: The China Market + The China Global Demographic = China's Super Consumers)
  16. ↑ Chan, Savio and Michael Zakkour. China's Super Consumers: What 1 Billion Customers Want and How to Sell it to Them. John Wiley & Sons, 2014. Online: p. 96-97. ISBN 1118834747, 9781118834749. -- print: ISBN 978-1-118-83474-9 p. 96-97 ("The Great Pizza Wars: In China, Everything Is Possible, but Nothing Is Easy", start p. 96, in Chapter 12: The China Market + The China Global Demographic = China's Super Consumers)
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  30. ↑ Horovitz, Bruce Domino's Pizza delivers change in its core pizza recipe USA Today (December 16, 2009). Retrieved on 6-13-10.
  31. ↑ Domino's says new recipes, frank ad campaign help double profit USA Today (March 2, 2010). Retrieved on 6-13-10.
  32. ↑ Horovitz, Bruce New pizza recipe did wonders for Domino's sales USA Today (May 7, 2010). Retrieved on June 13, 2010.
  33. ↑ "Domino's Just Unveiled a Radical Pizza Delivery Car That Took 4 Years to Build". AdWeek. Retrieved 2016-05-09.
  34. ↑ Domino's Orders The DXP, A Custom Pizza-Delivery System Yahoo Autos (October 21, 2015). Retrieved on 10-26-15.
  35. ↑ "Watch: The world's first pizza delivery by drone". Newsweek. 2016-11-16. Retrieved 2016-11-17.
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  49. ↑ "Snapshots". Detroit Free Press. April 26, 2009.
  50. ↑ "Off Beat: Domino's plan to let the lava cake flow gets knocked down". The Columbian. August 17, 2009.
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  64. ↑ "Oh Yeah! Domino's Becomes the Official Pizza of NASCAR – A Grit Pizza?" (Press release). The Auto Channel. February 13, 2003. Retrieved August 31, 2009.
  65. 1 2 "End of Domino's Pizza Delivery Guarantee". The Urban Legends Reference Library. Accessed July 8, 2011
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  67. ↑ Domino's Pizza Malaysia – Unique Selling Prepositions (USPs), Retrieved October 23, 2012.
  68. ↑ Domino's Pizza Singapore – About Us., Retrieved October 23, 2012.
  69. ↑ Find a Domino's – International
  70. ↑ www.dominosbiz.com – Domino's Around the World
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  72. ↑ Reuters: Profile Domino's Pizza Group plc Retrieved 2012-11-06
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  74. ↑ "Roaches, rodents force Domino's Pizza to close in Peru". www.dailymail.co.uk. Retrieved February 3, 2015.
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