SWOT ANALYSIS:

Strengths Leading pizza delivery company in

the US with more than 5,000 stores in the US

Global franchise operations - more than 3,500 in over 50 countries

Strong brand equity supported by heavy advertising & marketing campaigns

Supply chain & distribution network  

Weaknesses  Slow growing and declining

same-store salesWeakening bottom line 

 

Opportunities Growing presence in emerging

markets, particularly in India, ChinaLeverage supply chain &

distribution system to introduce new products  

Threats Changing consumer habits

towards healthier food choicesFranchise operations affected

by currency exchange fluctuationsIntensive competition from a

fragmented number of small competitors

!! BALANCE SHEET OF DOMINO’S PIZZA !!

All numbers in thousands

PERIOD ENDING Jan 3, 2010 Dec 28, 2008 Dec 30, 2007

Assets

Current Assets

Cash And Cash Equivalents 158,649   124,243   92,295  

Short Term Investments -   -   440  

Net Receivables 87,974   79,053   77,435  

Inventory 25,890   24,342   24,931  

Other Current Assets 6,155   26,613   31,781  

Total Current Assets 278,668   254,251   226,882  

Long Term Investments 1,936   3,000   2,664  

Property Plant and Equipment 102,776   108,430   122,890  

Goodwill 17,606   17,675   20,772  

Intangible Assets 3,233   3,672   10,130  

Accumulated Amortization -   -   -  

Other Assets 10,430   9,260   10,877  

Deferred Long Term Asset Charges 39,112   67,506   78,949  

Total Assets 453,761   463,794   473,164  

Liabilities

Current Liabilities

Accounts Payable 169,053   118,781   130,379  

Short/Current Long Term Debt 50,370   340   15,312  

Other Current Liabilities -   30,433   29,817  

Total Current Liabilities 219,423   149,554   175,508  

Long Term Debt 1,522,463   1,704,444   1,704,771  

Other Liabilities 32,869   34,419   43,024  

Deferred Long Term Liability Charges -   -   -  

Minority Interest -   -   -  

Negative Goodwill -   -   -  

Total Liabilities 1,774,755   1,888,417   1,923,303  

Stockholders' Equity

Misc Stocks Options Warrants -   -   -  

Redeemable Preferred Stock -   -   -  

Preferred Stock -   -   -  

Common Stock 586   570   597  

Retained Earnings (1,341,961) (1,421,705) (1,444,938)

Treasury Stock -   -   -  

Capital Surplus 24,487   1,853   -  

Other Stockholder Equity (4,106) (5,341) (5,798)

Total Stockholder Equity (1,320,994) (1,424,623) (1,450,139)

Net Tangible Assets ($1,341,833) ($1,445,970) ($1,481,041)

The History Of Dominos Pizza

Dominos Pizza is the second largest franchised pizza chain in the U.S.A., and the history of Dominos Pizza is similar to its rival Pizza hut; two brothers started it with borrowed equity in the sixties. Tom and James Monaghan bought a small Michigan Pizzeria called Dominick's, which was jointly run by them until James traded his share for a second hand car. Tom revitalized the image by changing the name to Dominos Pizza .

By the late seventies there were over 200 franchise pizza businesses in the States and Dominos Pizza was ready to go International. In 1983 Dominos Pizza opened its doors in Winnipeg, and in the same year opened its one thousandth store. Later that same year Domino's corporate history was to begin in Australia with its first franchise in Brisbane, on the East coast.

The locations for Dominos Pizza grew quickly from here as they sprung up in all sorts of diverse places including Bogotá. Despite Domino's Pizza springing up diverse locations, they were still a very traditional company. Domino's Pizza menu had been kept very simple and streamlined; they only sold one type of pizza crust which they named the regular pizza. Domino's Pizza dough was shaped by tossing the dough and pulling it into shape. The pizza menu included just two sizes of dough, it was not until much later that competition forced them to add a medium and extra large sized pizza. There were no such things as side orders you could have Pizza, pizza or Pizza and you could only drink a Coke with it.

In 1989 the history of Domino's Pizza was to change when the Deep Pan pizza was introduced, for the first time in twenty five years the company was being forced to react to market demand. This move consolidated the financial base and ensured the growth of Domino's Pizza , as the same year they opened their five thousandth store.

Tom Monaghan, the founder of Domino's Pizza, in his first restaurant somewhere in the 1960s. 

Photo credit Maproom Systems, Brett Schutzman

The wind of change had started and by 1992 they were to introduce the first non pizza itemto their menu, this was obviously a reluctant move as it was bread sticks. Domino Pizza dough was already on hand and the making of bread sticks is not so different.

For many years the company had advertised that if the delivery of their pizzas took longer than thirty minutes then the pizza would be delivered free. This was parodied by the Teenage Mutant Ninja Turtles movie which specified the "pizza dude has 30 seconds" to complete the delivery. The turtles pizza was late and they received a refund of $3 for "being two minutes late, dude!" However the benefits to Domino Pizza was enormous as millions of kids were to hear the name of Domino Pizza endorsed on celluloid. In 1993 Domino Pizza discontinued this policy and stated that if a customer was unhappy they could have a new pizza or a refund.

By 1994 Dominos Pizza marketing policy widened as chicken wings were introduced to the menu. At the same time the company hit the African continent as they opened a store in Egypt . By 1996 Dominos Pizza website was launched and the company declared global sales of nearly $3 billion.

Despite their reluctance to add a wider range menu they have as a company given the pizza industry many innovations that have now become standard. The belt driven pizza ovenwas the invention of Domino Pizza and they began using corrugated cardboard delivery boxes which were very effective at holding the heat within the pizza during the delivery time. Ever mindful of the fact that a cold pizza must be about the worst dining experience on earth Dominos pizza introduced the "Heat Wave," a portable electrical bag system that keeps the pizza hot during delivery.

By 1997 they had also had an internal modern facelift as their stores were all brightened up and the company introduced a new logo. Domino Pizza continued to grow exponentially and in 1997 they opened seven stores in one day but on 5 different continents.

In 2004, Super Bowl Sunday was the most hectic pizza delivery day of the year when Dominos Pizza sold over a million pizzas, which was an increase of 42 percent on their normal Sunday trading volume. As the company continues to grow so rapidly it is just as well the practice of adding a dot onto the logo was discontinued after three outlets as Dominos Pizza now has over seven thousand

outlets globally.

The Domino's Pizza Logo

Domino's PizzaFrom Wikipedia, the free encyclopedia

Domino's Pizza, LLC

Type Public (NYSE: DPZ)

Industry Restaurants

Founded Ypsilanti, Michigan, U.S.(1960)

Headquarters Ann Arbor, Michigan, U.S.

Key people Tom Monaghan, Founder

J. Patrick Doyle, CEO

Products Pizza, sandwiches, pasta,chicken wings, desserts

Revenue ▲ $1.425 billion USD (2008)

Employees 145,000

Website www.dominos.com

Domino's Pizza, Inc. (NYSE: DPZ) is an international pizza delivery corporation headquartered in Ann

Arbor, Michigan, United States. Founded in 1960, Domino's is the second-largest pizza chain in the United

States.[1] Domino's currently has nearly 9,000 corporate andfranchised stores[2] in 60 international

markets[3] and all 50 U.S. states. Domino's Pizza was sold to Bain Capital in 1998 and went public in

2004. Domino's menu features pizza, pasta, oven-baked sandwiches, wings, boneless chicken,

salads, breadsticks, cheesesticks, and a variety of dessert items.

Contents

 [hide]

1   History

o 1.1   Early years

o 1.2   International

expansion

o 1.3   Sale of

company

o 1.4   Current era

2   Products

3   Corporate governance

o 3.1   Charitable

activities

4   Advertising and

sponsorship

5   30-minute guarantee

6   International operations

7   See also

8   References

9   External links

[edit]History

[edit]Early years

In 1960, Tom Monaghan and his brother, James, purchased DomiNick's,[4] a small pizza store in Ypsilanti,

Michigan. The deal was secured by a US$75 down payment and the brothers borrowed $500 to pay for the

store. Eight months later, James traded his half of the business to Tom for a used Volkswagen Beetle. As

sole owner of the company, Tom Monaghan renamed the business Domino's Pizza, Inc. in 1965. In 1967,

the first Domino's Pizza franchise store opened in Ypsilanti. The company logo was originally planned to

add a new dot with the addition of every new store, but this idea quickly faded as Domino's experienced

rapid growth.[5] By 1978, the franchise opened its 200th store.[6][7]

In 1975, Domino's faced a lawsuit by Amstar Corporation, maker of Domino Sugar, alleging trademark

infringement and unfair competition. On May 2, 1980, a federal appeals court found in favor of Domino's

Pizza.[8]

[edit]International expansion

On May 12, 1983, Domino's opened its first international store, in Winnipeg, Manitoba, Canada.[9] That

same year, Domino's opened its 1,000th store overall, and by 1995 Domino's had 1,000 international

locations. In 1997, Domino's opened its 1,500th international location, opening seven stores in one day

across five continents.[6]

[edit]Sale of company

In 1998, after 38 years of ownership, Domino's Pizza founder Tom Monaghan announced his retirement

and 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.[10] A year later, the company named David A. Brandon Chairman

and Chief Executive Officer.[11]

[edit]Current era

The exterior of a Domino's Pizza store inSpring Hill, Florida.

In 2004, after 44 years as a privately held company, an employee of Domino's Pizza rang the opening bell

at the New York Stock Exchangeand the company began trading common stock on the NYSE under the

ticker symbol "DPZ".[12]

Industry trade publication Pizza Today magazine named Domino's Pizza "Chain of the Year" in 2003[13] and

did so again in 2010.[14] In a simultaneous celebration in 2006, Domino's opened its 5,000th U.S. store

in Huntley, Illinois, and its 3,000th international store in Panama City, making 8,000 total stores for the

system.[15] Also that year, the Domino's Pizza store in Tallaght, Dublin, Ireland, became the first in Domino's

history to hit a turnover of $3 million (€2.35 million) per year.[16] As of September 2006, it has 8,238 stores

which totaled US$1.4 billion in gross income.[17]

In 2007, Domino's introduced its Veterans and Delivering the Dream franchising programs and also rolled

out its online and mobile ordering sites.[7] In 2009, 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. In

addition, 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 national phone

ordering service 1-800-DOMINOS has been Kevin Railsback.[18]

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-flogging ad campaign in which consumers were filmed criticizing the pizza's quality

and chefs were shown developing the new product.[19][20] The new pizza was introduced that same month,

and the following year, Domino's 50th anniversary, the company acquired J. Patrick Doyle as its new CEO

experienced a historic 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.[21][22]

[23]

[edit]Products

A makeline at a Domino's

The current Domino's menu features a variety of Italian-American entrees and sides. Pizza is the primary

focus, with traditional, specialty and custom pizzas available in a variety of crust styles and toppings.

Additional entrees include pasta bread bowls and oven-baked sandwiches. The menu offers chicken side

dishes, breadsticks and salads, as well as beverages and desserts.[24]

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.[25] Historically, Domino's menu consisted solely of one

pizza in two sizes (12-inch and 16-inch), 11 toppings, and Coke as the only soft drink option.[26]

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 American 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.[27] Domino's started testing extra-large size pizzas in early 1993,

starting with the 30-slice, yard-long "The Dominator".[28]

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

tenders,[29] are packaged in a custom-designed box with two types of sauce to "heat up" and "cool down"

the chicken.[30]

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.[31]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.[32]

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.[33]

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.[34] That same year, Domino's

began selling its BreadBowl Pasta entree, a lightly seasoned bread bowl baked with pasta inside,[35] and

Lava Crunch Cake dessert, composed of a crunchy chocolate shell filled with warm fudge. Domino's

promoted the item by flying in 1,000 cakes to deliver at Hoffstadt Bluffs Visitor Center near Mount St

Helens.[36]

In 2010, the company changed its pizza recipe "from the crust up",[37] making significant changes in the

dough, sauce and cheese used in their pizzas. Their advertising campaign admitted to earlier problems

with the public perception of Domino's product due to issues of taste.[38][39]

[edit]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, made athletic director of theUniversity of Michigan in

January 2010, remains chairman.[40] Among 11 executive vice presidents are Michael Lawton, CFO; Asi

Sheikh, Team USA; Scott Hinshaw, Franchise Operations and Development; and Kenneth Rollin, General

Counsel.[41] Domino's operations are overseen by a board of directors led by Brandon. Other members of

the board are Andrew Balson, Diana Cantor, Mark Nunnelly, Robert Rosenberg and Bud Hamilton.[42]

[edit]Charitable activities

In 2001, Domino's launched a two-year national partnership with the Make-A-Wish Foundation of America.

That same year, the 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.[6] In 2004, Domino's began its current partnership with St. Jude Children's Research Hospital,

participating in the hospital's "Thanks and Giving" campaign since it began in 2004, raising more than $1.3

million in 2006.[43]

[edit]Advertising and sponsorship

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

In the 1980s, Domino's Pizza 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 catch phrase 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 though 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 Tuesday, March 31, 2009 and promised to reimburse store owners for the pizzas.[44]

Domino's sponsored CART's Doug Shierson Racing, which was driven by Arie Luyendyk, and the team

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."[45] Domino's also sponsoredMichael Waltrip Racing and

driver David Reutimann during the 2007 season in the NASCAR Sprint Cup Series.

[edit]30-minute guarantee

A car with a Domino's stick-on cone on roof

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 1993, Domino's settled another

lawsuit, this one 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 paid nearly $80 million. The guarantee was dropped that same

year because of the "public perception of reckless driving and irresponsibility", according to Monaghan.[46]

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 a half hour.[47]

[edit]International operations

Domino's Pizza is located in more than 60 countries.[48][49] The rights to own, operate and franchise

branches of the chain in Australia, New Zealand, France, Belgium, the Netherlands and the Principality

of Monaco are currently owned by Domino's Pizza Enterprises, having been sold off by the parent company

between 1993 and 2007. The master franchises for the UK and Ireland were purchased by Domino's Pizza

Group, now publicly traded as Domino's Pizza UK & IRL, in 1993.[50]

 Aruba

 Australia

 Bahamas

 Belgium

 Lebanon

 Malaysia

 Mexico

 Morocco

 Brazil

 Bulgaria

 Canada

 Cayman Islands

 People's Republic of China

 Chile

 Colombia

 Costa Rica

 Curaçao

 Cyprus

 Denmark

 Dominican Republic

 Ecuador

 Egypt

 El Salvador (soon to be re-entering)

France

 Germany (soon to be re-entering)

 Greece

 Guam

 Guatemala

 Haiti

 Honduras

 Iceland

 India

 Indonesia

 Netherlands

 New Zealand

 Nicaragua

 Oman

 Pakistan

 Panama

 Peru

 Philippines

 Puerto Rico

 Qatar

 Russia

 Saint Kitts and Nevis

 Saint Lucia

 Saint Martin

 Saudi Arabia

 Singapore

 Syria

 Spain

 Sri Lanka

 Switzerland

 Republic of China

 Trinidad and Tobago

 Turkey

 United Arab Emirates

 Ireland

 Israel

 Jamaica

 Japan

 Jordan

 Republic of Korea

 Kuwait

 United Kingdom

 United States

 Venezuela

 United States Virgin Islands

HISTORY OF DOMINO’S PIZZA(PART2):

The international fast food pizza delivery corporation, Dominos Pizza, is a renowned and popular choice amongst

people for relishing their favorite fast food, the Pizza. With its headquarters located just outside Ann Arbor,

Michigan, US, the Dominos Pizza has interesting background. Today, this huge franchise has a profound global

impact and has 8,000 corporate and franchise stores in more than 54 countries. In 2004, it was the second

largest pizza chain in the United States when it went public for less than $15 a share. To know interesting

information about the history and origin of Dominos Pizza, read the following lines.

 

Interesting Information on the Background of Dominos Pizza

It all started in the year 1960, when two brothers named Tom and James Monaghan bought a small pizzeria in

Michigan by the name of Dominick’s Pizza. They bought it for $500 and gave a down payment of $75. After 8

months, James quit and traded his shares with his brother for a second hand Volkswagen car. This led Tom to

revitalize the image of the eating joint and name it Dominos Pizza.

 

In the year 1968, a fire destroyed the company’s headquarters. In the year 1975, another hindrance came in the

form of a trademark-infringement lawsuit by Amstar, the maker of Domino sugar. Despite these obstacles,

Dominos Pizza expanded as a brand and in 1978, the 200th Dominos Pizza franchise was opened. Before the

end of the seventies, there were over 200 franchises of Dominos Pizza in US and it started to prepare to launch

itself on an international scale.

 

In the year 1983, Dominos Pizza opened its first international franchise at Winnipeg, Manitoba, Canada. This was

a major step in decentralizing its operations. By the end of 1983, it also opened another franchise at Brisbane,

Australia. Yet another milestone in that year was the opening of the 1000 th Dominos Pizza outlet. From here on,

the number of Dominos Pizza franchises increased quickly all over the world.

 

Despite international recognition, Dominos Pizza primarily remained as a traditional fast food joint. It had a very

simple menu and only sold one type of pizza crust that was named the ‘regular pizza’. The pizza dough was

shaped by tossing it in air and pulling it into shape. Only two sizes of the pizza dough existed before they added

medium and extra large owing to growing competition. There was absolutely no concept of side dish and side

others and the only beverage that was available with it was Coca Cola Classic.

 

This traditional outlook of Dominos was changed in 1989, when the Deep Pan Pizza was introduced. The

company was being forced to change according to the market demand. This in fact consolidated the financial

base of the brand and also ensured further growth of Dominos Pizza as a brand. The move to change the menu

and add items that was preferred by general public made it popular among many and that year, Dominos Pizza

opened its 5000th store. Till this time, Dominos rigorously marketed their brand and made it popular all over the

world.

 

In 1992, they introduced their first non-pizza item on the menu, which was breadsticks. Dominos was also the

first brand to sell chicken wings as a side dish in the year 1994. It was around this time that Dominos also

opened its franchise in Egypt, Africa. The Dominos Pizza website was launched in the year 1996 and the

company reached total global sales of $3billion. They also brought about new innovations in the pizza industry

that have now become the standard worldwide.

 

These include belt driven pizza oven, corrugated cardboard delivery boxes to retain heat while delivering and

also the ‘Heat Wave’, which is a portable electric bag that keeps the pizza hot while being delivered. In the year

1997, the company developed their new logo and the image was brightened up. The same year, the brand

opened seven outlets in one day, on five different continents. The most hectic pizza delivery day of the year in

2004 was recorded on the Super Bowl Sunday when over a million pizzas were sold, which increased their

normal Sunday trading volume by a staggering 42%. Today, the company continues to grow exponentially and

has over 8000 outlets worldwide.

IMPORTANT(REFER):

Who Are We?

Domino's Pizza is recognised as the world's leading pizza delivery company. Our expertise and passion for delivering hot and fresh pizzas has earned us numerous awards and the loyalty of millions of pizza lovers around the world.

Domino's Pizza Group Limited ('DPG') is a wholly owned subsidiary of Domino's Pizza UK & IRL plc which is quoted on the main market of the London Stock Exchange. DPG is the UK and Ireland's leading pizza delivery company and holds the master franchise to own, operate and franchise Domino's Pizza stores in these markets. Our first UK store opened in 1985 and the first Irish store opened in 1991. 

Over 20,000 team members work in our UK and Irish stores and in a range of support functions ranging from marketing, IT and training to fresh dough production at our three commissaries in Milton Keynes, Penrith and Naas, Ireland. The majority of our stores are owned by franchisees who are responsible for delivering our brand's high standards to customers.

There are over 620 Domino's Pizza stores in a growing number of towns and cities throughout England, Scotland, Wales and Ireland.

For more information about Domino's Pizza Group, download the Company Information Pack at the bottom of this page.

For information about Domino's Pizza around the world, please visitpublic.dominos.com

Our Mission, Culture And Priorities

At Domino's Pizza, our mission is to be the best pizza delivery company in the world. Our culture is best summed up in a chant that's sung in our stores: "Sell More Pizza, Have More Fun!".

Our priorities are to:

recruit, recognise and retain the best people deliver consistently high quality food on time

take great care of our customers

innovate in ways that matter to our team members and customers

ensure high image standards at our stores

treat others how we'd like to be treated

take time out to enjoy ourselves

Our Environmental Policy

Domino's Pizza UK and Irl plc recognises that its day to day operations impact the environment. The Company is committed to delivering great tasting, hot pizzas and will aim for continuous improvement in all aspects of its environmental performance, while continuing to deliver a great service to its customers.

Domino's Pizza is committed to monitoring its carbon emissions. It has already implemented a number of projects, which have reduced its carbon emissions and has further projects in progress and planned. It will continue to put in place projects to reduce its carbon footprint.

Domino's Pizza Group has an internal environment group whose purpose is to investigate ways of reducing carbon emissions and implementing these wherever possible.

Company Perspectives:

Domino's Pizza Mission Statement: To be the leader in delivering off-

premise pizza convenience to consumers around the world. As a team

united throughout the world, we will accomplish our Mission by: 1. Being

fanatical about product quality and service consistency; 2. providing

product variety to meet all customer needs; 3. placing team member and

customer safety and security above all other concerns; 4. creating an

environment in which all team members feel valued, because they are; 5.

building and maintaining relationships that reward franchisees and other

partners for their contributions.

GROWTH PROFILE :

Founding in the 1960s

Tom Monaghan, founder of Domino's Pizza, was born in 1937 near Ann

Arbor, Michigan. Following his father's death in 1941, Monaghan lived in

a succession of foster homes, including a Catholic orphanage, for much of

his childhood. His mother, after finishing nursing school and buying a

house, made two attempts to have Tom and his brother live at home with

her, but she and Tom failed to get along. During these years Monaghan

worked a lot of jobs, many of them on farms. His father's aunt took him in

during his senior year of high school, but after that he was once again on

his own. A quote from Monaghan in his high school yearbook read: "The

harder I try to be good the worse I get; but I may do something

sensational yet."

For several years Monaghan worked to try and save money for college;

he joined the Marines and saved $2,000, but gave it in several

installments to a fly-by-night "oil man" he met hitchhiking, who took the

money and ran. Monaghan returned to Ann Arbor to live with his brother

Jim, who worked for the Post Office and did occasional carpentry work at

a pizza shop called DomiNick's. When Jim Monaghan overheard the pizza

shop owner discussing a possible sale, he mentioned buying it as a

possibility to Tom. With the aid of a $900 loan from the Post Office credit

union, in December 1960 Jim and Tom Monaghan were in business in

Ypsilanti, Michigan.

Within eight months, Jim Monaghan took a beat-up Volkswagen as a

trade for his half of the partnership. Tom moved in across the street from

his shop. The store Monaghan bought had little room for sit-down dining;

from the start, delivery was key. The first drivers, laid-off factory

workers, agreed to work on commission. After only $99 in sales the first

week, profits climbed steadily to $750 a week. Early on, Monaghan made

decisions that streamlined work and greatly enhanced profits: on two

separate occasions he dropped six-inch pizzas and submarine sandwiches

from his menu when he was shorthanded at his shop, reasoning that he

and his staff could handle the rush better without making special-sized

pizzas or sandwiches in addition to regular pizzas. When he went over

the numbers the day after, both times Monaghan found that his volume

and profits had increased. Keeping the menu simple made financial

sense.

Although his salary rose to $20,000 a year, Monaghan was not satisfied.

On the advice of Jim Gilmore, a local chef with some restaurant

experience, Monaghan opened a Pizza King store offering free delivery in

Mt. Pleasant, near the Central Michigan University campus. Gilmore ran

the original DomiNick's as a full partner with Monaghan. By early 1962,

although the Ypsilanti store was not doing well, Gilmore persuaded

Monaghan to open a Pizza King at a new Ann Arbor location, which

Gilmore would oversee while Monaghan went and whipped the original

DomiNick's back into shape. Gilmore convinced Monaghan to continue

expanding in a financially dangerous way: since Gilmore had been

bankrupt when the partnership began, all papers were in Monaghan's

name. By 1964, when Gilmore became ill, he made his differences clear:

he liked sit-down stores while Monaghan ran delivery. He asked for

$35,000 for his share in the pizzerias. Though Monaghan considered the

price preposterous, he did want to separate from Gilmore. He hired

lawyer Larry Sperling, who worked out a deal whereby Monaghan would

pay Gilmore $20,000. Gilmore would keep two restaurants in Ann Arbor;

Monaghan, two pizzerias in Ypsilanti and one in Ann Arbor. Though their

partnership was dissolved, Monaghan was still dependent on Gilmore's

success in business. In February 1966 Monaghan bought one more shop

from Gilmore, but later that year Gilmore filed for bankruptcy, with a

total debt of $75,000, in Monaghan's name. Monaghan managed to sell

Gilmore's restaurant, leaving him immediately responsible for only

$20,000, with the new owner of Gilmore's to pay off related debts on a

month-by-month basis.

As Monaghan's operations grew, the original owner of DomiNick's

decided to maintain rights to the name. Under deadline for a Yellow

Pages ad, driver Jim Kennedy came up with the name Domino's Pizza.

The new company incorporated in 1965. Free from the Gilmore-related

debts, Monaghan was ready to begin franchising. The first board of

directors included Tom, his wife and bookkeeper, Margie, and Larry

Sperling. Sperling drafted a franchise agreement in which Domino's

would keep 2.5 percent as royalties from sales, 2 percent to cover

advertising, and 1 percent for bookkeeping. As Monaghan stated in his

autobiographyPizza Tiger: "By today's standards, the royalties were far

too favorable to the franchisee. But it served our purpose then, and I was

not concerned about covering all future contingencies."

The first franchisee, Chuck Gray, was a man visible in local and state

politics; he took over an original store on the east side of Ypsilanti. While

Sperling and Monaghan hammered out financial matters--the former

wanted to control costs, the latter to build sales--Domino's Pizza slowly

gathered a base of corporate staff. The second franchisee, Dean Jenkins,

was handpicked by Monaghan to take over the first store to be built from

the ground up. By July 1967, when Jenkins's store was up and running,

Domino's Pizza moved to East Lansing, home of Michigan State

University. Its dormitory population, at approximately 20,000, was the

largest in the nation. Dave Kilby, originally hired to do some radio

copywriting for Domino's, later bought into a franchise, then began

working at company headquarters, located above the Cross Street shop

in Ypsilanti. Kilby then worked on franchisee expansion with Monaghan.

In February 1968 a fire swept through Monaghan's original pizza store.

Advertising manager Bob Cotman escaped the building just in time,

climbing down a fireman's ladder. While the pizza shop reopened within

two days, headquarters was wiped out and Domino's first commissary,

with $40,000 of stored goods, was destroyed. The staff pulled together,

with each existing store location responsible for producing one pizza

item--cheese, dough, chopped toppings--which drivers then ferried from

one store to the next to keep operations running.

The biggest challenge for Monaghan was not simply covering the total

fire losses of $150,000 (only $13,000 paid for by insurance), but also

paying the leases on five new franchises and finding store operators as

soon as possible. While Tom worked on his task, Margie Monaghan

brought in Mike Paul, her contact at the Ypsilanti bank, who soon joined

Domino's to run the commissary. Paul fired half of the staff and cleaned

up operations; he introduced caps, aprons, and periodic spot checks for

employee neatness.

Monaghan learned a lot in the early years of Domino's, due in part to

road trips he took to research business and learn from competitors.

When observing the competition didn't result in better methods,

Monaghan innovated. Looking for equipment ideas at a Chicago

convention, he found a meat-grinder which he used to chop cheese as

well as mix consistent pizza dough in less than a minute, in contrast to

standard mixers, which took eight to ten minutes to mix dough. Dough,

once mixed, was stored on oiled pans; although covered by towels, the

outside edges of the dough hardened. Monaghan discovered an air-tight

fiberglass container that stored dough very well, and his practice later

became a standard in the industry. Monaghan was also dissatisfied with

standard pizza boxes: they were too flimsy to stack, and heat and steam

from the pizza weakened them. Monaghan prodded his salesman to work

with the supplier and devise a corrugated box with airholes, which also

became an industry standard.

Franchising in the 1970s

Plans began in earnest for Midwest expansion as Domino's jumped on the

1960s franchise bandwagon. While Monaghan had worked on his plan to

expand on college campuses, opening a new store a week in late 1968

proved to be the beginning of a nightmare. Monaghan opened 32 stores

in 1969 and was hailed as Ypsilanti's boy wonder. Spurred by McDonald's

great success going public in 1965, Monaghan planned to do the same.

With the aid of loans, he bought a fleet of 85 new delivery cars, and

spruced up his personal image; he also hired an accounting firm to

computerize the company's bookkeeping. When moving information from

paper to computer, Domino's lost all its records. Perhaps as a result, the

company underpaid the Internal Revenue Service by $36,000. Monaghan

was forced to sell his stock for the first time to raise the money to pay the

IRS.

Monaghan tried to do too much, too fast. Ohio stores opened before

Domino's reputation had spread that far and sales were poor. This was

only the beginning of the downturn: on May 1, 1970, Monaghan lost

control of Domino's. Dan Quirk, who had bought Monaghan's stock,

recommended that he contact Ken Heavlin, a local man known for

turning businesses around. Heavlin, in exchange for Monaghan's

remaining stock, would run the company, get loans to cover IRS debts,

and after two years keep a controlling 51 percent interest in the

company, with Monaghan getting 49 percent. In the meantime, Domino's

became the target of lawsuits from various franchisees, creditors, and

the law firm Cross, Wrock.

In March 1971 Heavlin ended his agreement with Monaghan, who shortly

went to speak with each franchisee, persuading them that Domino's

would survive the crisis and they would all fare better working with him

rather than against him. Their lawsuit was dropped. Monaghan pushed

on, and Domino's was back in business, however tight its financial

strings. One man instrumental in the growth of the early 1970s was

Richard Mueller. Originally from Ohio, Mueller bought a franchise in Ann

Arbor in 1970, during Domino's lowest period. After Mueller ran this

store for a year, Monaghan sent him to Columbus to revive an ailing

store; within three months, sales shot up from $600 to $7,000 a week.

Mueller soon operated ten Domino's franchises and incorporated as Ohio

Pizza Enterprises, Inc. Within six-and-a-half years Mueller opened fifty

stores. As Domino's grew, Mueller went on to become vice-president of

operations in 1978.

Quick to rebuild Domino's, Monaghan encouraged trusted employees and

friends to expand. Steve Litwhiler opened five stores in Vermont, while

Dave Kilby, who had relocated during the Domino's slump, managed to

build a strong base in Florida. A significant hire by Kilby was Dave Black,

a top-selling manager who later rose to become president and COO of

Domino's Pizza.

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The year 1973 was a turning point for Domino's. The company introduced

its first delivery guarantee, "a half hour or a half dollar off," as stated in

the company newsletter the Pepperoni Press. The College of Pizzarology

was founded to train potential franchisees. The company decentralized as

well: accounting was moved from Ypsilanti headquarters to local

accountants, while the commissary was reorganized as a separate

company.

Domino's introduced its corporate logo, a red domino flush against two

blue rectangles, in 1975. The company was sued the same year by

Amstar Corporation, parent company of Domino Sugar, for the right to

use the name. After a five-year battle, Domino's won, but not until after

having opened more than thirty new stores under the interim name Pizza

Dispatch.

Free to expand, Domino's planned to grow by 50 percent each year. By

the late 1970s, several acquisitions contributed significantly to company

growth. Domino's merged with PizzaCo Inc., in 1978, gaining 23 open

stores plus a handful more under lease. The merger with this Boulder-

based company allowed Domino's to move into Kansas, Arizona, and

Nebraska. The following year, joining with Dick Mueller's Ohio Pizza

Enterprises, Inc., Domino's added 50 stores in Ohio and Texas, for a total

of 287 stores. The company ended 1979 by announcing plans to expand

internationally.

Rapid Growth in the 1980s

The 1980s were a decade of phenomenal growth for Domino's Pizza, but

this time the company was prepared. While Monaghan had always feared

that formal budgeting systems promoted bureaucracy, with the advice of

Doug Dawson, Monaghan decided to design company-wide budgeting

procedures, which Domino's continued to use as training tools for

potential franchisees. Dawson implemented the new accounting methods

and moved on to become vice-president of marketing and corporate

treasurer. Instrumental in Domino's surge was John McDevitt, a financial

consultant Monaghan met in 1977. Among other accomplishments, he

created and became president of TSM Leasing, Inc., a financial services

company which loaned money to franchisees who could not find other

start-up financing.

To Monaghan, operations was the backbone of the business. When Dick

Mueller left the post of vice-president of operations in 1981 to work as a

franchiser once again, Monaghan decided to regionalize Domino's

operations. Mueller's previous job entailed far too much travel, and

changes were necessary. Monaghan set up six geographic regions, with a

director fully responsible for each territory. The regional system, as

Monaghan stated in Pizza Tiger, "gave us the long communication lines

with tight controls at the working ends that we needed for rapid but well-

orchestrated growth."

At the executive level, Bob Cotman took over as senior vice-president of

operations, including marketing. Dave Black advanced from field

consultant and regional director to vice-president of operations. Both

men (like Dick Mueller and Monaghan himself) had climbed every step of

the Domino's ladder, after beginning as delivery driver and pizza maker.

In 1981 Black carried Monaghan's favored "defensive management"

strategy--whereby each store concentrated on keeping the customers it

had—ø a new level, by moving the company's focus away from its top-

performing stores to its weakest ones. Bringing the lower performers up

worked extremely well. As the company added an average of nearly 500

stores each year through the decade, newer, weaker stores were

constantly given attention to improve sales.

One other element vital to Domino's 1980s growth spurt was choosing

Don Vlcek, formerly in the meat business, to head the eight commissary

operations. Vlcek focused on focused on uncovering best practices and

disseminating them throughout the organization. When he discovered

that one commissary saved on laundry bills by rinsing out the towels

used to dry trays, making them last a week before cleaning was

necessary, Vlcek made all other commissaries do the same. When he

found that another commissary's manager was buying from a local

cheese distributor instead of a less-expensive national one, the manager

reworked his purchasing policies. Vlcek moved sauce-mixing from the

commissaries to the company's tomato-packing plant, which resulted in

highly consistent, quality pizza sauce. Once Vlcek had taken care of the

basics, in one eight-month period he opened a new commissary a month,

all with state-of-the-art equipment.

All the support Monaghan received gave him time to fulfill boyhood

dreams on a dramatic scale. In 1983 he bought the Detroit Tigers

baseball team, which went on to win the World Series in 1984. He

followed with the establishment of Domino's Farms in Ann Arbor, a $120

million corporate headquarters modeled after architect Frank Lloyd

Wright's Golden Beacon tower. Wright advocated the integration of a

high-rise building in a rural setting, rather than an urban one. Monaghan

planned to set up a working farm adjacent to the tower.

In 1985, Advertising Age placed Domino's "among the fastest-growing

money makers in the restaurant industry." The company had to keep

pace with not only its own growth but with that of its competition,

including the industry leader, Pizza Hut, which had more than 4,000

units to Domino's 2,300. Domino's stepped up advertising, increasing

media spending 249 percent over the previous year. Pizza Hut entered

the delivery business in 1986, posing a huge threat to Monaghan's

empire.

Domino's sales reached $1.44 billion by 1987. The company had grown to

3,605 units, spreading to Canada, Australia, the United Kingdom, West

Germany, and Japan. While 33 percent of U.S. stores were company-run,

international units were franchised, usually to one operator who could

opt to subfranchise. The international marketing challenge was to

convince buyers of the need for delivery. Back in the United States,

Domino's imitated McDonald's by tailoring an ad campaign to attract the

Hispanic market. Competition in the late 1980s got so tough that

Monaghan was quoted in Advertising Age as saying, "I want people here

in the company to think of it as a war." Unfortunately, with wars come

casualties.

By 1989 more than 20 deaths had occurred involving Domino's drivers,

calling the company's 30-minute delivery guarantee into question. A

Pittsburgh-based attorney representing a couple whose car was

broadsided by a driver subpoenaed Domino's for its records. Citizen's

groups, major news networks, and the National Safe Work Place Institute

joined in the heated criticism. Domino's responded with a national ad

campaign and with various tactics at the franchise level. One franchisee

hired an off-duty police officer to track his drivers to ensure that they

obeyed the law.

Domino's opened its 5,000th store by January 1989, moving into Puerto

Rico, Mexico, Guam, Honduras, Panama, Colombia, Costa Rica, and

Spain. U.S. sales hit $2 billion. Monaghan named Dave Black as

president and chief operating officer, announcing his own intentions to

spend more time on community work. In May Domino's introduced pan

pizza, its first new product in 28 years. This news was hardly as big,

however, as Monaghan's October announcement of his intent to sell the

company. After a buyout attempt in the form of an employee stock

ownership plan failed, Monaghan went shopping for buyers. By April

1990 Domino's cut its public relations and international marketing

departments and continued cutting executive and corporate support staff

as part of a company-wide effort to improve profitability. Payroll that

year decreased by $24 million. Kevin Williams, who made his name as a

regional director, replaced Mike Orcutt as vice-president of operations.

At the store level, Domino's opened fewer than 300 units in both 1989

and 1990.

Retrenching for the 1990s and Beyond

With Domino's sales slipping, and rivals Pizza Hut and Little Caesar's

gaining market share, Monaghan returned to Domino's in March 1991 to

pull his company back on track. By December he had fired David Black,

along with other top executives. Former franchisee Phil Bressler became

vice-president of operations. Domino's closed 155 stores, cut regional

offices from 16 to 9, and unloaded extravagances such as corporate

planes, a three-masted ship, a travel agency, a lavish Ann Arbor

Christmas display, and various sports sponsorships. Monaghan made

some personal sacrifices too, leaving his post on the boards of directors

of 16 Catholic colleges and organizations. Domino's 1991 revenues

remained flat at $2.6 billion, and the company posted a loss of $67

million.

Adding three new senior executives, the company geared up to battle

Pizza Hut, which had aired an ad showing unkempt Domino's drivers

buying Pizza Hut products. Domino's moved its advertising accounts to

New York's Grey Advertising, Inc., from the local ad agency Group 243.

While Monaghan was away, Pepsico's Pizza Hut had converted half of its

7,000 units for home delivery.

Under fire, Monaghan insisted on maintaining Domino's original concept

of a simple menu that speeds order preparation, allowing the company to

uphold its 30-minute guarantee. In an effort to be flexible--and to

compete with Pizza Hut's pan pizza--Domino's offered a new pizza with

more cheese and an increased number of toppings. Taking another tip

from its rival, Domino's worked on developing a single U.S. phone order

number for Domino's customers and a new computer system to track

sales, costs, and trends. The company closed the Columbus and

Minneapolis offices, with corporate headquarters in Ann Arbor assuming

their duties. The overall goal was to decrease debt. Monaghan

considered making a public stock offering again in 1992, but too few

buyers were forthcoming. The company also worked to lessen the

number of company-owned stores.

In November 1992 Monaghan shook up his upper ranks by replacing his

longtime adviser and vice-president of finance, John McDevitt, with Tim

Carr, another financial executive at Domino's, and hiring Larry Sheehan,

a former executive vice-president of Little Caesar's, as vice-president of

marketing and product development. Sheehan immediately put his stamp

on the turnaround effort, convincing Monaghan to experiment with new

strategies and products, including salads, thin-crust pizza, and

submarine sandwiches. "Tom Monaghan is now very open about the pizza

business," he said. "He believes we need to take a different approach to

this business and be willing to change."

And the changes seemed to work. Earnings for 1993 picked up, after

dropping significantly the two previous years. In yet another change,

Domino's dropped its famous 30-minutes-or-less pledge after a jury

awarded a $78 million settlement to a woman who had been hit by a

Domino's delivery driver in 1989. Monaghan stated that "with our

success in home delivery has come a negative public perception that we

are not committed to safety."

In January 1994 Larry Sheehan left Domino's, after a dispute with

Monaghan over the size of his year-end bonus. While his departure was

widely considered a loss to the company, his changes had taken hold, and

Domino's revenues crept upward, to $2.5 billion in 1995. Shortly

thereafter Domino's celebrated the opening of its 1,000th international

store, in a suburb of Perth, Australia. With a stated goal of having more

international than domestic stores, Domino's opened stores in Ecuador,

Peru, and Egypt in 1995, and planned to have 3,000 international stores

by the year 2,000. By 1996 foreign sales stood at $503 million, and in

1997 Domino's entered its 50th international market.

Sheehan was succeeded as vice-president of marketing and product

development by Cheryl Bachelder, a seasoned executive with experience

at Planters, Gillette, and Procter & Gamble who brought focus to

Domino's efforts. "We're not trying to be fun and wacky and do delivery

and carry-out all at the same time," she said. "We're trying to excel

single-mindedly on the basics of this business." In March 1997 Domino's

announced its previous year results, which dispelled any doubts that the

company was back on track. Earnings were a record $50.6 million on

sales of $2.8 billion. "We believe the return to focusing on our core

business--pizza delivery--coupled with great new products and strong

international growth accounted for our tremendous results in 1996," said

CFO Harry Silverman.

For his part, Monaghan says that he's back to stay. "I plan on being at

the helm a long time--at least fifteen years," he said. "Basically, God

meant me to be a pizza man. Pizza is my life."