About Domino’s Franchising Business
Domino’s started in Michigan in 1960 with a single pizza shop. Today it offers pizza, buffalo wings, breadsticks, desserts, and ice creams.
Domino started franchising in 2007, and according to NerdWallet, the store currently has 17,000 locations. The company owns only 342 stores, while 5,815 are US franchises and 10,842 stores are in 90 international markets.
How To Buy a Domino’s Franchise
The company offers three types of franchises to franchisees. The available store types are:
- Traditional Stores: Stores found in shopping centres, strip centres, and general retail locations. These stores offer both in-store dining, carry-out, and delivery services.
- Non-traditional Stores: These include stores in office buildings, shopping malls, and stadiums that primarily offer carry-out services with minimal seating spaces.
- Transitional Stores: These are located in small markets Domino’s intends to explore with plans to expand if the store is successful. They start as exclusive carry-out stores with customized menus for their markets.
Domino’s prefers to franchise stores to former employees and existing franchisees. Its official website states that 95% of its US franchisees were part-time pizza makers and delivery drivers prior to becoming franchise owners. Domino’s franchise has strict requirements for entirely new franchises, but it’s not impossible to become a new franchise owner.
Is Buying Domino’s Franchise Profitable Business Opportunity in 2022?
The rise of online ordering has been amazing for Domino’s. The company says digital orders grew by about 50% in 2018 and now make up about 25% of all U.S. orders. When it comes to making money, Domino’s is one of the most successful franchises. The company has been in business for more than 50 years and has a huge fan following. But buying a Domino’s franchise in 2022 will not be that favourable for the simple reason that it is a mature brand and the market is saturated.
The key to finding a profitable fast-casual franchise opportunity is understanding enough details about your potential franchise. Fransmart, the top franchise development firm for emerging brands is committed to helping you make the best franchise investment decisions. Dan Rowe, Fransmart CEO, and his team at Fransmart have overseen the opening of over 5,000 restaurants for its current and past franchise development portfolio brands like Five Guys, The Halal Guys, Taffer’s Tavern, and PayMore.
Below we share a few profitable franchise opportunities for 2022 that have low start-up costs and potentially high returns. These emerging concepts can offer franchisees the chance to get in with a new brand and ride the wave of financial success that early Domino’s franchisees enjoyed.
Profitable Franchise opportunities in the fast-casual industry available for sale are:
- RISE SOUTHERN BISCUITS & RIGHTEOUS CHICKEN
- BROOKLYN DUMPLING SHOP
- CURRY UP NOW
- IKE’S LOVE & SANDWICHES
- JARS BY FABIO VIVIANI
- SLAPFISH
- THE HALAL GUYS
- TAFFER’S TAVERN
- SAVANNAH SEAFOOD SHACK
The Cost of Buying a Domino’s Franchise
The franchise fee of a Domino’s varies based on the type of store you wish to invest in. The franchise cost for traditional stores ranges between $144,450 to $582,500 while for non-traditional stores it costs $101,450 to $573,500. Transitional stores tend to have lower costs.
Different cost categories, including one-time, upfront, and ongoing fees, are included in the total franchise cost of a Domino’s franchise. Here’s an estimated breakdown of the cost of buying a Domino’s franchise:
| Name of Fee | Low | High |
| Initial Fee | $0 | $10,000 |
| Leasehold Improvements | $5,000 | $300,000 |
| Furniture, Fixtures and Equipment | $62,000 | $145,000 |
| Signage | $5,200 | $35,000 |
| 3 Month Rent | $3,000 | $25,000 |
| Security Deposit | $1,000 | $10,000 |
| Opening Inventory and Supplies | $2,750 | $6,500 |
| Opening Advertising and Promotion | $0 | $3,000 |
| Training Expenses | $1,000 | $3,000 |
| Insurance | $9,000 | $50,000 |
| Miscellaneous Opening Costs | $2,500 | $7,000 |
| Additional Funds – 3 Months | $10,000 | $73,000 |
| ESTIMATED TOTAL* | $101,450 | $667,500 |
How To Finance Your Domino’s Franchise
Domino’s does not offer franchise financing to finance the investment cost. To finance their planned Domino’s franchise, franchisees can turn to financial service firms for loans.
Franchisees are meant to develop a strong financing profile ahead of seeking loans. Some of the loan requirements include good credit and proven business history. These requirements determine how much a bank will offer as a loan for your franchise. The types of loans sought may include term loans, personal loans for business, and equipment financing.
Domino’s franchise agreements last for 10 years. Therefore, loan repayment terms can span over multiple years depending on the agreement with the services firm.
Domino’s Franchise Training and Support System
Under Domino’s preference for internal employees to become franchisees, the duration and type of training are dependent on the amount of experience a franchisee has within Domino’s.
Franchisees that have been with Domino’s for up to 12 months are required to complete a franchise pre-qualification process. After qualification, franchisees are expected to complete study tracks within the Franchise Management School to obtain the “Qualified Franchisee Candidate” status.
Training programs are exclusively held online unless Domino’s designates a physical location for training. Franchisees are required to complete the initial training to operate a franchise. Further training may be required by the franchisor or franchisee depending on identified needs of a franchise.
Advantages And Disadvantages of Buying a Domino’s Franchise
In deciding whether to buy a Domino’s franchise, you should consider the advantages and disadvantages of the franchise. The following are the advantages of buying a Domino’s franchise:
Minority Discounts
Domino’s stands out from other franchises by offering discounts to veterans, minority groups, and women. This makes Domino’s franchise suitable for you if you fall into any of the groups recognized by Domino’s for discounts.
Low Opening Cost
Compared to other major franchises like Pizza Hut and McDonald’s, Domino’s franchise cost is low.
The following are the disadvantages of a Domino’s franchise:
Preference For Former Employees and Existing Franchisees
This established preference is a huge hurdle for new franchisees to buy a Domino’s franchise. Although becoming a new franchisee is not impossible, it is challenging. Domino’s itself states that the dependence on internal franchisees makes its franchise model a huge success.
No Territory Protection
Domino’s offers no territory protection to its franchisees. Therefore, it’s not impossible to find multiple Domino’s stores in a specific location where Domino’s experiences high patronage. The lack of territory protection from Domino’s puts franchisees at risk of experiencing profit cuts in overpopulated areas.
Conclusion
Domino’s has several drawbacks for potential new franchisees from its promotion from within to the basic fact that it is a staid, mature brand with little opportunity for new franchisees to build great wealth. For investors looking for fresh, new brands with years of upside, contact Fransmart today to get started on your franchise journey.
References:
https://smallbusiness.chron.com/buy-dominos-pizza-franchise-40453.html
https://www.mashed.com/208193/how-much-dominos-pizza-franchise-owners-really-make-per-year/
https://www.franchisehelp.com/franchises/dominos-pizza/
https://www.nerdwallet.com/article/small-business/dominos-franchise
https://biz.dominos.com/about-us/franchising/
https://www.franchisedirect.com/foodfranchises/dominos-pizza-franchise-07460/ufoc/