Domino’s Pizza Group eyes £2b system sales with new franchise agreement

This will replace the current MoU with franchisees.

Domino’s Pizza Group (DPG) announced a new five-year Profitability and Growth Framework (PGF) with its franchise partners, set to replace the current Memorandum of Understanding (MoU) in January 2025.

The PGF is aimed at expanding the company’s footprint, targeting 1,600 stores and £2b in system sales by 2028, and 2,000 stores generating £2.5 billion in system sales by 2033. The framework includes revised incentives for new store openings and increased investments in digital and marketing initiatives.

Franchisees will maintain their 4% system sales contribution to the National Advertising Fund, with DPG committing an additional fixed 0.2% of system sales. Digital investment will also see franchisee contributions to the eCommerce fund rise to 1% of system sales, alongside DPG’s 0.25% contribution to cover platform costs.

To encourage expansion, new store incentives will now be spread over five years, with £100,000 for virgin territories and £150,000 for split territories. A food rebate mechanism will be introduced to support value-driven campaigns.

DPG estimates its contributions to the PGF will total £3m to £4m annually starting in fiscal year 2025. Additional investments of £4m to £5m million annually are planned for technology, cybersecurity, and supply chain capacity.

The company reported a 5.3% increase in total orders and a 2.7% rise in like-for-like sales during the first nine weeks of the fourth quarter. Rising labour costs due to the UK budget are expected to have a £3m annual impact starting FY2025, but DPG said mitigation plans are underway.

The PGF, negotiated with the Domino’s Franchise Association, has received unanimous support from franchisees.