DOMINOS PIZZA INC (DPZ)

Domino's Pizza is the largest pizza company in the world, operating more than 19,800 locations across over 90 markets as of January 1, 2023, with roughly 99% of stores owned and operated by independent franchisees rather than the Company itself. Founded in 1960, the Company operates through three reportable segments: U.S. stores (33% of 2022 revenue of $1.49 billion), international franchise (6% of revenue at $295.0 million), and supply chain (61% of revenue at $2.75 billion). The business model centers on generating royalties and fees from franchisees, selling food, equipment and supplies through vertically integrated supply chain operations in the U.S. and Canada, and operating 286 U.S. Company-owned stores used partly for testing innovations and training.

Domestically, the network comprises 6,400 franchised stores run by 725 independent franchisees, governed by ten-year franchise agreements carrying a 5.5% royalty fee plus advertising contributions of 6% of sales, with a 99% renewal rate in 2022. Internationally, 13,194 stores operate primarily under master franchise agreements averaging a 3.0% royalty, with the largest franchisee, Domino’s Pizza Enterprises, operating 3,751 stores across 13 markets. The Company competes in the U.S. QSR pizza category, a $40.7 billion market as of 2022, holding leading dollar market share in both delivery (~32%) and carryout (~19%), competing against Pizza Hut, Papa John’s, Little Caesars, and other food delivery aggregators.

Its supply chain segment operates 22 U.S. dough manufacturing and distribution centers, five in Canada, and additional specialized facilities, supplying over 7,200 stores and sharing profits with franchisees through profit-sharing arrangements. Key supplier relationships include a single-source cheese contract (expiring September 2024), a meat topping supplier contract under renegotiation, and an exclusive Coca-Cola beverage agreement expiring December 2023. Technology is a central differentiator, with digital channels generating roughly two-thirds of global retail sales in 2022, supported by innovations such as the Domino's Tracker, Piece of the Pie Rewards loyalty program, and the Domino's PULSE point-of-sale system used in all U.S. stores and approximately 79% of international stores.

As of January 1, 2023, the Company had approximately 11,000 employees and $5.02 billion in total debt stemming from multiple recapitalization transactions completed between 2015 and 2021. The Company emphasizes corporate stewardship initiatives, including greenhouse gas reduction commitments (Science Based Targets by 2032, net zero by 2050), diversity and inclusion programs, and philanthropic partnerships, notably with St. Jude Children's Research Hospital, to which the Domino's system has contributed $109.2 million since 2004.