Domestic same-store sales growth
In the Domino’s Pizza (DPZ) system, there are a total of 377 company-owned restaurants, and all of them are located in the US market. In the chart below, you can see the same-store sales growth in domestic restaurants over a five-year period. Same-store sales reached a peak of 9.9% year-over-year in 2010, dropped to 3.5% in 2011, and recovered back up to 7.5% in 2014.
In the previous parts of this series, we learned that about one-third of Domino’s (DPZ) revenue comes from company-owned stores. Company-owned stores account for only 3% of the 11,000 plus Domino’s locations.
Meanwhile, Chipotle Mexican Grill (CMG) has only company-owned restaurants, choosing not to franchise its restaurants at all.
Chipotle Mexican Grill makes up about 1% of the Consumer Discretionary Select Sector SPDR (XLY).
What good are company-owned restaurants?
Company-owned restaurants have a purpose. They serve as test sites for promotions, new products, and for making operational improvements. The company also uses these stores to train team members as well as new store managers, and to develop potential franchisees.
So, what caused same-store sales to spike to 9.9% in 2010? We’ll try to answer that question in the next part of this series.