The ongoing row between Domino’s Pizza and its franchisees has led to shares of the firm falling by nearly 7 % as per a recent report published by a leading media house. As per details of the report around 11 of firm’s largest franchisees have warned the board that unless they are given a bigger share in the company’s profits they will stop opening new stores. Dominos has declined to comment on the report. Dominos has around 70 franchisees that are given ingredients along with goods and services to sell its products and maintain standards of food and service across their restaurants.
But the operators have set up an association called Dominos Franchise Association UK and Ireland to fight for better profit sharing as they face rising costs and have requested for better support from the company. These partners said that the firm was urging them to open more sites in locations that already had Domino outlets as it would benefit the firm as a whole but would reduce the profits of franchise partners. During 2017 around 95 new Domino stores were opened by large franchisees but the firm is planning to open just 60 in 2018 due to the ongoing shuffle.
The public disagreement has led to downfall of the firm’s share prices and analysts have also predicted that it will not be able to fulfill its target of owning 1600 stores in the UK if the conflict goes at this pace. The firm’s sales fortunately have been growing at a steady pace despite the ongoing strife and have climbed by 6 % to £ 303.3 million during the last quarter. The firm has also continued to open new outlets though consumer spending in food outlets has reduced in the last few months due to concerns about Brexit and fears of a rise in inflation.