Join our community of smart investors

Domino's refutes depth of franchisee discontent

How bad are relations between Domino's and its franchisees? Not as bad as The Sunday Times says, the takeaway pizza company tells shareholders
March 21, 2019

Following a Sunday Times article that claimed discussions between Domino’s Pizza (DOM) and its franchisees were further from being resolved than investors had been led to believe, the company issued a stock exchange announcement to say it “strongly refutes the reported allegations”.

IC TIP: Sell at 237p

Some franchisees feel Domino’s is not taking enough of the strain of rising costs and want to get a better deal. This has created uncertainty about the number of new stores that will be opened this year as well as the group’s longer-term target to increase UK store numbers form about 1,100 to 1,600.

New openings increasingly involve splitting sales territories which can come at a cost to existing stores. Domino’s has been offering financial support to encourage new openings and help to franchisees, which last year cost £3.4m.