Domino’s Pizza hits back at reports it misled the City over franchisee row
Domino’s Pizza published a statement today hitting back at allegations that it had misled the City over the state of its relationship with its franchisees.
Domino’s said it “strongly refutes the reported allegations” and said it “has been clear and transparent that it has been in commercial discussions with franchisees, which are continuing.”
The Sunday Times reported the contents of a letter Domino’s received from a group of store owners last week that said that comments suggesting a resolution to an ongoing dispute could be found were “extremely misleading”, because Domino’s management were “at total odds with the franchisees”.
Read more: Domino's Pizza franchisees demand meeting with top boss over falling profit
Domino’s and its franchisees have been at loggerheads over the way profit is shared with franchisees refusing to open new stores until the row is resolved.
Chief executive David Wild had recently told shareholders that the firm was "very optimistic" about finding a solution with its franchisees.
About 90 per cent of the 67 store owners are members of the Domino’s Franchisee Association which says their share of profits has fallen to 50 per cent from 61 per cent over the past four years.
Domino's Pizza Group reported a rise in revenue of 14.5 per cent to £534.3m in its full-year results last week, but profit continued to slide down 22 per cent to £61m.
Read more: Domino's profits hit by international 'growing pains'
Wild attributed the slowdown to "growing pains" in its international arm, where the group owns stakes in Domino's chains in the Nordics and Switzerland.
In the letter, the store owners group said it had "repeatedly raised concerns about the lack of any medium and long-term strategy" for the company.
Domino's Pizza Group's share price has fallen by almost a third in the last year, powered by a slower rate of store openings and disputes with both franchisees and shareholders. The firm is currently valued at just over £1bn.