Domino's Master Franchise Model

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Case Details:

Case Code : OPER080
Case Length : 19 Pages
Period : 1983 - 2009
Organization : Domino's Pizza Inc.
Pub Date : 2009
Teaching Note :Not Available
Countries : US
Industry : Food and Beverage

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Domino's Pizza originated as a small pizza store owned by Dominick Di Varti at the Michigan University campus in the US under the name 'DomiNick's Pizza'. In 1960, the pizza store was bought by two brothers, Thomas S. Monaghan (Tom) and James S. Monaghan (James) who were students at the University...

Store Operations

Domino's domestic stores did not offer dine-in facilities and very few of its international stores did so. Hence, they did not require restaurants and staffing facilities.

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As the business was focused and the menu limited and consisted only of pizzas and a few side dishes, the stores were small and inexpensive to build. Running a Domino's unit did not require expensive infrastructure or large stores...

The Model

The business model of Domino's focused on delivering high quality pizza in a timely manner. One of the components of this model was the franchise system, which Domino's considered critical for its success...

Domino's provided two types of franchises - internal and external. Employees of Domino's who had worked at the stores as general manager for at least one year were eligible to become internal franchisees...

Domino's helped the franchisees in the US to select store sites and set up the stores according to the company's specifications. Domino's also provided the design plans, equipment, and fixtures. The franchisees were also required to provide adequate training to the store employees...

Master franchising helped Domino's establish a significant presence in a short span of time, as the master franchisees were well versed with the local markets. In 1982, Domino's established DPII to look after the international expansion activities of the company...

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