Franchise business model is the route to success

Mark Lewis, new store opening coordinator for Domino’s Pizza, says there’s still room for growth in this fast moving sector

Starting a business can be an exciting yet daunting prospect, but by choosing to open a franchise, budding entrepreneurs can achieve their dream with the support, knowledge, experience and security of a national brand.

Domino’s Pizza has been one of the fastest growing franchise brands of the last decade, growing from less than 200 stores at the turn of the millennium to nearly 800 stores now. The company first arrived in the UK in 1985 following 25 successful years in the USA. It now has 790 stores in the UK and Ireland and, with plans to grow to 1,200 stores in the future, continues to achieve strong growth. Domino’s is now in its 20th consecutive year of growth, with 2013 sales up 6.4 per cent.

What should a potential franchisee be looking for in a business?
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Domino’s Pizza remains one of the largest and most successful franchised businesses of recent years. Above all, a potential franchisee should be looking for a business that has growth potential and is in a geographical area and field that suits them.

What do you look for in a Domino’s Pizza franchisee when you recruit a new candidate?
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Domino’s has a fanatical focus on customer service, an outstanding product and is looking for people with a creative flair who can be passionate about the product and service they offer. This is not just a choice of job or profession, it is in many ways a lifestyle choice. We look for those who can be the ‘pizza personality’ in their neighbourhood.

With so many outlets open, are there still opportunities for new franchisees?
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There are still some fantastic opportunities for growth and we’re looking for the most highly talented people who are keen to capitalise on the nation’s desire for pizza.

Admittedly, you may have to be more creative with your choice of locations, as the opportunities for new stores are more geographically restricted than they used to be. If you are looking for a new store in the south of England, London, one of the major cities or in Scotland, you may be disappointed. However, opportunities still exist in smaller towns, particularly in the Midlands and north of England, and there are also resale opportunities as franchisees sell their businesses and change their lifestyles.

What would a potential franchisee expect following an application to Domino’s?
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We want to ensure every potential franchisee is sure this is what they want. We encourage them to spend a lot of time considering their investment and ensuring they are certain this is the lifestyle for them. We like people to take their time and consider this step very carefully and we will never try to force a franchisee to take a store that is not right for them.

Initially, Domino’s would invite the applicant to an open day, which is essentially a presentation about the company and an opportunity to get involved in a few group case studies about situations they may encounter as a franchisee. There is also an opportunity to ask questions informally of Domino’s staff - and, of course, a chance to eat some pizza.

The applicant may then be invited to a more formal interview with Domino’s staff, during which their background and aspirations are explored in greater depth. Should they pass this interview, they are invited to work for seven days in a store, so they understand what being a franchisee involves. If they are still keen to be a franchisee after that, we ask them to prepare a business plan and present this at a second interview with senior management from Domino’s Pizza.

What should they look for in a franchisor once they join?
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For us, taking on a franchisee is somewhat akin to a marriage - we want it to be a long-term arrangement that is good for both parties. We are certainly not just interested in the fees from a new franchisee, as the person is far more important.

Every franchisee is given comprehensive management and franchise training to help make their new venture a success. For us this involves an 18-day residential course at a dedicated training centre in Milton Keynes.

Franchisees are also supported by an experienced head office team, which covers every aspect of the business. They will have access to dedicated marketing and business consultants, who will meet them regularly in their new business. A network of successful Domino’s franchisees are always on hand to share their knowledge and experience and we run regular franchise meetings and dinners across the country.

If I was to join Domino’s as a franchisee, what would I need in the way of finance?
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The cost of a new store with Domino’s is between £280,000-£300,000 and applicants will need at least £150,000 of unencumbered assets. In return, Domino’s will provide a store and all the necessary support to help a new franchisee run a great business. If you wish to buy an existing store, the price is negotiated between buyer and seller, but you would need to demonstrate a similar level of unencumbered funds.

At our stage of development as a company, we are able to be very selective about who we award a franchise opportunity to. We take on only the absolute best candidates. Having the necessary financial backing does not guarantee entry, as we are after the right person first and foremost.

Once you have invested in a Domino’s franchise, what could happen next?
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Having got the taste for a Domino’s franchise, many franchisees have gone on to open additional stores. In fact, most of our franchisees own more than one store and we look for multiple unit operators. Over half of our franchisees own at least three stores. Normally we would expect at least six months to elapse before you open your second store, but each franchisee is dealt with on a case by case basis.