How Much Does it Cost to Open a Domino’s Franchise in 2022?
Do you want to know everything about Domino franchises and how much it will cost you to start a dominos franchise, then this article will put you through everything you need to know. In this article, I’ll be giving you full details on dominos’s franchise and how much will be needed to open it.
With locations in every state, Domino’s Pizza is the second-largest pizza chain in the nation. Customers can choose to pick up their pizzas from the neighbouring business or have them delivered (while delivery is speedy, the 30-minute “guarantee” is no longer in effect).
Domino’s offers deep dishes, thin crust, and “Brooklyn Style” (also known as New York style) pizza in addition to their standard style.
Domino’s lures customers in with a wide selection of toppings and coupons so they may get a meal for a fair price.
Domino’s has expanded its menu in recent years to include more foods other than just pizza, including bread sticks, buffalo wings, pasta, sandwiches, and desserts.
Opportunities for Domino’s Pizza Franchises – History
Tom Monaghan and his brother James bought “Dominick’s,” a pizza shop in Ypsilanti, Michigan, in 1960, and it is where Domino’s got its start.
Monaghan borrowed $500 to purchase the shop, and in 1961 James exchanged his share of the company for a Volkswagen Beetle.
To sustain himself while he pursued his studies to become an architect, Tom Monaghan started the dominos franchise business. But soon after, he stopped attending classes to focus on growing the company.
Domino’s began with just pizza but has since expanded to include a variety of sides and appetizers, including buffalo wings, breadsticks, desserts, and more.
Additionally, they have incorporated technology into their business, making it simple for customers to order and track their pizzas via Domino’s app.
They frequently introduce customer service programs, including their brand-new “Delivery Insurance,” which is well-liked by clients and help build a strong customer base.
More than half of the Dominos franchise owns several locations.
When it comes to creating franchises, Domino’s significantly prioritises internal candidates and often has stricter restrictions for outsider candidates. Franchise agreements also have a ten-year term.
Cost of Opening a Dominos Franchise
Between $156,450 and $682,500 is the projected total investment needed to open the Dominos franchise.
The upfront expenses that come with buying a Domino’s include the following expenses. Numerous of these are one-time costs required to start the franchise.
1. Initial Investment
Depending on your area and the kind of Domino’s you wish to open, the initial investment will vary considerably. At the low end, you can anticipate spending about $145,000; at the high end, the sum can exceed $500,000.
2. Initial Franchise Fee
For opening a new location or franchising an existing one, Domino’s initial franchise charge is $10,000.
Be aware that the Dominos franchise occasionally levies a $25,000 “reservation fee.” More information on this additional cost can be found in the franchise disclosure paper you receive.
3. Cash Liquidity
$75,000 in liquid capital is needed.
4. Advertising and Marketing Fee
For marketing and advertising backed by corporate, you can anticipate paying 3% to 4% of your store’s weekly gross sales, however, this cost may be greater.
5. Net Value
The required net worth as of right now is $250,000.
6. Franchise Loyalty Fee
Franchise royalty fees, which serve as the primary source of income for franchisors, average 5.5% of a store’s weekly gross sales.
Conditions for a Domino’s Franchise
Currently, Domino’s is not employing individuals who have never previously worked for Domino in their franchise business.
To that end, you must have at least a year of experience working as a Dominos franchise general manager or supervisor in order to become a franchisee in the United States.
Before starting a business, franchisees must have a thorough understanding of Domino’s brand and culture, according to Domino’s.
This gives them protection from the possibility that some customers could not be enthusiastic about a pizza dominos franchise company, which could result in the closure of new outlets and harm the brand’s reputation.
How much Money Does a Franchise of Domino’s Make Annually?
The average Dominos franchise owner reports earning between $107,00 and $116,00 per year in pay or profit. These are some fairly amazing figures, and many franchisees are able to pay off debt and manage numerous locations.
More than half of franchise owners have multiple locations. This translates into more money in your pocket, which, depending on how you handle your money, might eventually lead to a seven-figure salary.
If these figures excite you, you should be aware that owning a franchise has a lot of other benefits as well.
Is the Profit from Domino’s Franchise Worth the Investment?
We use estimates from DealStats, a database of purchased private firm transactions derived from U.S. business brokers and SEC filings, to give a valuation multiple for the Dominos franchise.
We looked at the larger franchise market and selling price multiples for bigger systems where there is more available transaction data.
1. Less than $1 Million in Net Sales
Net Sales times 0.31 equals the estimated selling price.
2. $1.00 Million – $5.00 Million in Net Sales
Net Sales times 0.34 equals the estimated selling price.
3. More than $5 Million in Net Sales
Net Sales times 0.86 equals the estimated selling price.
A Dominos franchise would sell for $443,364 if they put it up for sale based on the median multiple of.34 and the average unit volume (AUV) of $1.30 million in 2021. This is more than the $419,475.75 midpoint investment.
You can increase your profit if you own several dominoes franchised stores. The median multiple for pizzeria owners with over $5 million in AUV is 0.86.
Selling your multi-unit franchise system would cost $5.80 million if you owned 5 Domino’s franchisees with sales of $5.77 million. This is roughly three times the expected $2.10 million initial outlay.
This won’t always work, though, as it can cost more to erect a franchised business in your area and establish its reputation in the neighborhood.
Types of Stores Dominos Pizza Franchises
Currently, Domino’s offers franchises for two different kinds of stores
1. Traditional Domino’s Pizza Locations
These are shops with sufficient parking for customers and delivery vehicles that are primarily found in shopping malls, strip malls, and other comparable retail venues.
Pizza and other branded goods are sold in Domino’s traditional outlets via delivery and takeout options.
2. Domino’s Pizza Alternative Locations
In non-traditional places, they offer Domino’s pizza and other endorsed goods and services. Office buildings, malls, stadiums, toll highways, zoos, airports, and other retail establishments are among these places.
Domino’s Pizza’s non-traditional locations typically just provide carry-out service, although depending on the area, they might also have seating available.
For a licensing fee based on facility sales, Domino’s also grants licenses to operators of major public entertainment or comparable facilities, such as stadiums or their concessionaires, as well as to owners of convenience stores, allowing them to sell approved items.
The licensee may purchase pizza and other products that are permitted for takeout at the establishment.
Benefits of Dominos Franchise
Franchise owners receive perks like a 401k and insurance in addition to a comfortable wage, which is a fantastic bonus.
Additionally, they receive a 50% discount on food purchased from their own store. With this method, you can acquire your preferred pizza or wings at a much lower price.
When it comes to funding, owning a franchise is less risky than starting your own firm, making it simpler to obtain a loan from a bank.
We have already demonstrated the business plan and operational strategy. A significant advantage is a comfortable income with lower risk than other Domino franchise concepts.
You specifically have the advantage of having a well-known and reputable brand with Dominos. As a result, promotion should be somewhat simpler, and people will become aware that a new Domino’s has arrived in town.
Your Domino’s franchise won’t need much work to succeed because it has a good reputation among pizza aficionados.
The business also provides new franchise owners with training, which can last anywhere from a few weeks to about two months.
Depending on the need, they provide these training services both online and in person.
Although many owners may have prior management expertise, this help can be provided to anyone who is unfamiliar with owning or operating a Domino’s, making it accessible to outsiders.
This is excellent for new business owners who might find it difficult to make the change from employee to franchisee of a pizza restaurant.
Problems of Dominos Franchise
Even though this franchise is well known, there are some difficulties that come with it. The initial rivalry is with the nearby franchise owners within the company.
You must discover a way to stand out and either draw in new consumers or dazzle those who are already around. You could have to compete with numerous Domino’s locations in some densely populated cities.
Whether you choose to operate a conventional business or a nontraditional one will determine another issue.
Your business will be crowded with customers if you open in a non-traditional place like a zoo or concert venue.
Dominos typically does business through carry-out services, but in these unconventional situations, they are conducted in person.
Despite the fact that other businesses frequently accept in-person orders, Domino does not. It’s crucial to have trained efficient employees and to feel at ease in a fast-paced setting.
It’s also vital to keep in mind that you might need to hire more staff in busy locations, which necessitates higher salaries and more training.
There are several benefits to purchasing a Domino’s franchise if you’re looking to buy a business.
As with any franchise, you should be sure to ask for the complete franchise disclosure form so you are fully aware of both the most recent costs you are paying and what is required of you by Domino’s corporate headquarters.
Be aware that Domino’s provides internal candidates who wish to launch a franchise with a very substantial preference.
If you’re an outside candidate who is seriously interested in a Domino’s franchise, you might want to think about beginning your career there as an employee and then applying for a franchise from that position.
It’s a useful method to learn about the typical day at a Domino’s franchise.