Back
~
1
min read
· Posted on
February 21, 2024

Domino's Australia is raising $165m to say guten tag to its Domino's Germany counterpart

Domino's Pizza launched into Germany in a joint venture with British Domino's... but now, British Domino's is out.

What's the key learning?

  • Domino’s Pizza Enterprises (the ASX-listed biz) launched Domino’s into Germany in a joint venture with the licence holders of the British Dominos.
  • Now, British Domino's is out so Domino's Pizza Enterprises is raising $165m to buy out their UK counterpart - this will make them even bigger despite already being the largest master franchise owner under the Domino's brand.
  • A master franchisor is a person or company that pays the underlying brand a fee for the rights to grow that brand in a particular territory.

👉 Background: Domino’s actually started as a pizza joint called DomiNicks in Michigan in 1960. An Australian company named “Domino’s Pizza Enterprises” bought the rights to operate and franchise Dominos across a number of countries, including Australia, NZ, France and the Netherlands.

👉 What happened: Domino’s Pizza Enterprises (the ASX-listed biz) launched Domino’s into Germany in a joint venture with the licence holders of the British Dominos. But now British Domino’s is out.

👉 What else: So Domino's Pizza Enterprises is raising $165m to buy out their UK counterpart. While Domino’s Pizza Enterprises was already the largest master franchise owner under the Domino’s brand, this will make them even bigger.

What's the key learning?

💡A master franchisor is a person or company that pays the underlying brand a fee for the rights to grow that brand in a particular territory.

💡This effectively means that the underlying company (ie Domino’s), only needs to deal with one company, as opposed to thousands of franchisors. And while this may sound a little bit strange to add another layer of ownership, it’s not uncommon.

💡For example, 7-Eleven runs a similar master franchisor model and so too does Cash Converters. Whereas other businesses like Jim’s Group - of the mowing, cleaning and gardening fame has a direct relationship with each franchisee.

Ready to win at money?

Sign up for Flux and join 100,000 members of the Flux family

A button to App StoreGoogle Play store button
Excellent  4.9 out of 5
Star rating
No items found.