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How Domino’s Pizza Is Expanding Its Business

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Current operations

By the end of 4Q17, Domino’s Pizza (DPZ) operated 392 company-owned restaurants, 5,195 domestic franchised restaurants, and 9,269 international franchised restaurants. In the last 12 months, the company has increased its overall unit count by 1,045 restaurants, which represents growth of 7.6% from 13,811 restaurants in 4Q16.

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International Restaurants segment

In the last four quarters, the International Restaurants segment has increased its unit count by 829 restaurants, which represents growth of 9.8% from 8,440 restaurants in 4Q16. 

In 4Q17 alone, this segment increased its unit count by 326 restaurants by opening 339 restaurants and closing 13 restaurants.

Domestic Franchised Restaurants segment

In the last 12 months, the Domestic Franchised Restaurants segment has increased its unit count by 216 units, which represents growth of 4.3% from 4,979 restaurants in 4Q16. 

In 4Q17 alone, this segment has increased its unit count by 96 restaurants by opening 102 new restaurants and closing six restaurants.

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Domestic Company-Owned Restaurants segment

Compared to 4Q16, the unit count of Domini’s company-owned restaurants remained flat at 392 units. In 4Q17, the unit count of company-owned restaurants declined by seven units as the company opened ten new restaurants and refranchised 17 restaurants.

In January 2018, the company’s management reaffirmed its unit growth guidance of 6.0%–8.0% per year for the next three to five years.

Peer comparisons

During the same period, McDonald’s (MCD) and Pizza Hut, which operates under the umbrella of Yum! Brands (YUM), have increased their unit count by 342 units and 328 units, respectively.

Next, we’ll look at Domino’s EBIT margin.

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