Domino’s UK targets digital growth with new franchise deal

UK – Domino’s Pizza Group (DPG), the master franchisee of multinational fast food pizza delivery chain Domino’s has signed a 5-year agreement with its franchise partners to increase investments in its digital platform and store network in the UK.

Domino’s Pizza Group (DPG) has introduced a new Profitability and Growth Framework, which the company claims has received “unanimous support” from its franchise partners.

This framework facilitates shared investments in marketing and technology, alongside providing incentives for new store openings.

The London-listed pizza chain, which operates under the U.S.-based Domino’s Pizza brand in the UK and Ireland, is targeting £2 billion ($2.55 billion) in sales by 2028, driven by an expansion to over 1,600 stores—approximately 200 more than its current number.

From 2025, DPG plans to contribute £3 million to £4 million (US$3.8 million–US$5.1 million) annually under the new deal and invest an additional £4 million to £5 million per year into its cost base, which includes its technology platform, cybersecurity, and supply chain capacity.

Analysts at RBC Capital noted that the increased spending under the new franchisee framework should help ease concerns about a potential reset, particularly following the UK’s recent budget, which raised employer National Insurance contributions and the minimum wage starting in April.

These changes have sparked worries about higher taxes and increased business costs for companies.

The new franchise agreement is set to begin on January 3, after the current deal concludes.

This follows DPG’s resolution of a profit-sharing dispute with franchisees in 2021, after more than two years of negotiations.

Additionally, DPG plans to extend the new store incentives to five years, up from the previous three-year term.

DPG expects to open 50 to 60 new stores in its 2024 fiscal year and is on track to open its 1,400th store in the coming year, expanding its network of over 1,350 stores across the UK and Ireland.

In the first nine weeks of the fourth quarter, DPG reported a 5.3% growth in total orders and a 2.7% rise in like-for-like sales.

Despite the UK budget’s impact, Domino’s has forecast a £3 million tax hit, as it pushes forward with its plans to open hundreds of new stores across the UK.

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