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