Pizza wars: Domino’s throws hat in the ring

2014-10-15 17:56

Entrepreneurs interested in a Domino’s franchise may have to wait a little longer to get involved in the brand.

Pizza delivery giant Domino’s Pizza launches its first few stores at the end of the month as it fights for a slice of the action in what is being dubbed as “pizza wars”.

“We’re not actively franchising at the moment,” said CEO of Taste Holdings Carlo Gonzaga.

“People can apply for franchises but we’re not taking deposits or anything like that. We think we’ve got to do a good job of it; we need to open our first stores so that we can do a good job. The first few stores will be owned by us and then we will start franchising,” he added.

This comes on the back of the recent return of Pizza Hut to the country. Pizza Hut, which is under the Yum! Brands umbrella which owns brands such as KFC, left the country in 2008.

Analysts think that these two pizza chains might give local pizza giant Debonairs, owned by Famous Brands, a run for its money.

“Taste Holdings has had pizza franchises in Scooter’s Pizza and St. Elmo’s, but I think the Dominos brand is going to have a higher degree of gravitas,” said analyst Chris Gilmour.

“And I think they will get Pizzas that taste better, marketed a lot better because they will have this big brand behind them and that will be big competition. Together with Pizza Hut they have huge, powerful brands behind them and will take on Debonairs.”

Gonzaga said they are not worried about competition from other pizza companies, notably Debonairs and Pizza Hut.

“We think competition is great and we think competition is what makes things better and poor businesses poorer and we think we’ve got the best of the breed,” he said.

Gonzaga said the response and anticipation of Domino’s Pizza has been “off the charts”.

“Domino’s is the largest pizza delivery company in the world and there is always competition. Am I happy that we’ve got the fastest horse in the pack? Absolutely,” he said.

“Dominos is a leading global delivery pizza chain and they have about 11 000 delivery units and they have the fastest delivery which is thirty minutes,” added Gonzaga.

Gilmour said more competition may be a good thing for the consumer.

“It will give them more choice and hopefully might even bring down prices,” he said.

According to research by Euromonitor International, fast food remained popular in South Africa with the growing trend towards convenience and value for money.

The report said KFC remained the leading fast-food brand in the country in 2013 with a value share of 24%.

“More people around the world are asset rich and time poor, and are struggling to find the time to do anything and these are the perfect conditions for fast food to grow,” said Gilmour.

Africa has attracted the attention of fast food multi-nationals and many of them have plans to enter Africa or increase their presence in Africa.

Domino’s Pizza is no different.

“We’ve got the rights for six other African countries so once we start here we will actively start going into our neighbouring countries and a bit further north,” said Gonzaga.

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