Over the past few years, Dominos has come back into the hearts and minds of consumers with a whole new product. The company has overhauled its pizza sauce, cheese, and dough to come up with a pizza that patrons like better. However, this is only part of the equation for how Dominos makes its money. The corporation itself actually profits the most from selling products, especially dough, to its own stores. About 97% of dominos are run by franchisees, which depend on corporate dominos to supply the food products, equipment, and supplies to the actual stores. This is highly profitable for the company, generating about one billion dollars annually.
Corporate Stores and Profit Sharing
There are some corporate stores, about 388 in total, and the company makes another 19% of its revenue from those stores. This is a drop in the bucket compared to what the company makes from its 9,900 franchise stores. While this is not an entirely new way to do business, it is somewhat rare in the food service industry. Other industry giants such as Pizza Hut, McDonalds, and Burger King determine revenue from royalties and rents received from franchise stores, and supplement that income with the sales made from corporate-owned stores. A single Dominos spends about $210,000 purchasing products and equipment from corporate Dominos. Profit sharing can make purchasing this way seem enticing to Dominos franchisees, however. Food that is purchased from the corporation will yield franchisees a cut of the pre-tax profits in the form of a nice “cash-back” check.