Essay: Diversified Franchise System

19 Oct

Essay: Diversified Franchise System

Sample Essay

In Domino’s, there exist a diversified, large, committed, global network of franchises that has been a success and is instrumental in pizza delivery around the globe. By January 2010, there existed 8,533 stores with 4,437 store located in US while the rest are located in other economies.

In the US there are six franchises with each franchise operating more than 50 stores, further; the largest domestic franchise operates more than 143 stores. Domestic franchises own and operate more about four stores in efforts to align the franchisees strategies with those of Domino’s, Domino’s encourages the franchisees to have limited interests in other business activities. This is a great strategy that has made Domino’s a success. 50% of pre tax profits are shared equally between the Domino’s and franchisees that purchase dough from the chain supply and dough manufacturing centres owned by Domino’s. This arrangement has played an important role in establishing a strong link between Domino’s and the franchisees and further increasing the profitability of franchisees by cutting the costs. This has established a very healthy relationship between the two players.

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