US Domino’s Pizza coming to a pizzeria near you

2014-04-10 15:41

Taste Holdings has signed an exclusive, long-term franchising deal with the company behind the international Domino’s Pizza chain, which promises to be lucrative for the local fast food and jewellery franchiser.

Today, the company said Taste Food Franchising, its wholly-owned subsidiary, will now hold the exclusive rights to initially develop the US Domino’s Pizza brand in seven southern African countries.

Two other countries, Zambia and Malawi, will follow after certain conditions attached to the deal had been met. The deal will now see Taste’s existing Scooters Pizza and St Elmo’s store brands converted to Domino’s stores by the end of Taste’s financial year, which is next February. New Domino’s store openings are also planned for that time.

No new stores for Scooters and St Elmo’s will be opened in the next few months although Taste said it would accept new applications for Domino’s franchises.

“Consumers will get the best of what Scooters and St Elmo’s have to offer, as well as what Domino’s has to offer, worldwide,” Taste boss Carlo Gonzaga told City Press.

“They can expect to see good-looking new stores, a refreshed menu and even better delivery than they’ve been used to in the past.”

Taste listed Domino’s “leading global online ordering platform” as a “very important” motivator for the deal. Consumers wishing to order pizza from Scooters and St Elmo’s currently only have the option to call a central number to locate their nearest stores, which they then call to place their orders; so the online ordering platform will offer consumers more convenience.

A case study by technology giant Microsoft last year showed that Domino’s was among the top five companies in online transactions, accounting for one-third of all internet orders in the US.

“Domino’s diverse mobile ordering apps let customers order from 80% of the world’s smartphones,” said Microsoft.

Taste said the company was the worldwide pizza leader in online ordering and tracking technology, consistently being in the top five companies in the world by the number of online transactions – an honour it shares with high-tech firms Amazon and Apple. It has total sales of $8 billion (R83 billion) across the system and is listed on the New York Stock Exchange.

Gonzaga said his group did not offer online ordering, but would do so with Domino’s, which would have a dedicated “.za” website.

“They will be investing in infrastructure for this region,” he said.

The company also plans to centralise fresh dough production, which Gonzaga said would be based alongside his company’s current sauce, spice and “value-added” meat facilities in northeastern Pretoria.

“We currently do some 2 500 deliveries a month to our stores and the dough will form part of this existing network,” said Gonzaga.

The deal was a long time coming. Taste’s small size when Gonzaga first reached out to Domino’s – its earliest reported revenue was R20.9 million in 2006 – scuppered talks. But last year, Taste had R506.4 million in turnover.

“I first approached Domino’s 10 years ago with the objective of converting then,” said Gonzaga. “The deal didn’t happen because we were a lot smaller. This time negotiations moved quite quickly.”

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