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How Domino’s Has Been Expanding Its Business

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DPZ’s current operations

By the end of 2Q17, Domino’s Pizza (DPZ) operated 396 company-operated restaurants, 5,042 domestic franchised restaurants, and 8,779 international franchised restaurants. In 2Q17, the company increased its unit count by 217 units, opening 244 new restaurants and closing 27 underperforming restaurants.

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Unit growth

In the past four quarters, DPZ has increased its overall unit count by 1,281 restaurants with the opening of 1,375 restaurants and the closing of 94 underperforming restaurants. The addition of new restaurants represents a growth of 9.9% from almost 13,000 units in 2Q16.

In the past four quarters, the company has increased the unit count of its company-owned restaurants by ten units, opening ten new restaurants, transferring one franchised restaurant to company-owned restaurants, and closing one underperforming company-owned restaurants.

The unit count of DPZ’s domestic franchised restaurants has increased by 183 units in the past four quarters. It has opened 202 new restaurants, closed 18 restaurants, and transferred one franchised restaurant to a company-owned restaurant.

The company has increased the unit count of franchised restaurants by 1,088 units, opening 1,163 new restaurants and closing 75 underperforming restaurants.

Tech advancements

Apart from the opening of new restaurants, the company is also focusing on the implementation of technological advancements. By the end of 2Q17, 70% of Domino’s international stores had Domino’s Pulse, and over 1,100 restaurants had implemented the Global Online Ordering platform.

Over the past four quarters, McDonald’s (MCD) and Chipotle Mexican Grill (CMG) have increased their unit counts by 507 and 215 restaurants, respectively.

Next, we’ll look at Domino’s 2Q17 EBIT (earnings before interest and tax) margin.

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