This company knows the rules of the pizza delivery game. Domino's Pizza runs the world's #2 pizza chain (behind YUM! Brands' Pizza Hut division), with more than 9,700 delivery locations in about 65 countries. (The chain includes almost 5,000 stores throughout the US.) Domino's menu features several different styles of pizza with a wide array of topping options, as well as additional items such as bread sticks, cheese bread, and chicken wings. Its stores are principally delivery locations and generally do not have any dine-in seating. The company owns and operates more than 390 locations in the US, while the rest are franchised.
Domino's relies heavily on franchising for both its dominant position in the pizza delivery market and the bulk of its revenue. Local operators, including #1 franchisee RPM Pizza, bear the cost of building and operating most of the company's far-flung network of eateries while paying royalties and fees in order to use the Domino's brand. The company also supplies its domestic franchisees with food products through 16 regional distribution centers. (Most international franchise units get their ingredients through third-party suppliers.) Domino's foodservice supply operation accounts for about 55% of sales.
While rival Pizza Hut commands the largest portion of all quick-serve pizza sales, Domino's leads the pizza delivery segment with nearly 20% market share. The company has been able to expand rapidly thanks in large part to its delivery-store format with no dining area, which keeps startup and maintenance costs low for franchisees.
Domino's largely competes on price and the convenience of home delivery, but in 2010 the company launched a marketing campaign focused on a reformulated pizza recipe. While touting changes in how food is prepared is not so unusual in the cut-throat quick service restaurant industry, the campaign took the unexpected tact of admitting that consumers were unhappy with the taste of Domino's pizza. The effort to focus on food quality and taste was spearheaded by J. Patrick Doyle, who was promoted to CEO that year after leading the company's domestic operations. He replaced longtime chief David Brandon who stepped down as CEO while remaining chairman. In an effort to improve its product offerings beyond the quality of its pizza, Domino's rolled out a whole new range of hot chicken wings and all-white meat chicken nuggets in 2011.
Domino's is making a big push to expand its international franchise network, having added more than 1,500 new international locations over the past five years including stores in Bulgaria, Germany, Romania, Ukraine, and Vietnam. The UK, overseen be master franchisor Domino's Pizza UK & IRL, is one of the company's core international markets. – less