Domino's Pizza shares surge 30% as it resolves dispute with franchisees

Pizza giant plans to invest around €23m after resolving its long-running dispute with franchisees in Ireland and the UK

Shares in Domino’s Pizza surged by almost 30% after the fast-food delivery business announced it has resolved a long-running dispute with its franchisees in its core markets of the UK and Ireland, and will invest around £20m (€23.5m) in the business as a result.

Domino’s — which has around 86 outlets across the island of Ireland and 2,000 employees here — said it has struck a profit-sharing deal with franchisees after more than two years of negotiations.

The dispute and agreement mainly relates to franchisees in the UK, but includes some in the North. However, it does not relate to Domino’s franchisees in the Republic.

The resolution includes renewed food rebates for franchisees, and requires them to open at least 45 new stores per annum over the next three years.

99% support

Domino's UK said the deal received the support of franchisees representing over 99% of its UK stores, which total more than 1,100. Domino’s still expects to reach at least the upper end of its medium-term target of £1.6bn-£1.9bn (€1.9bn-€2.3bn) in system sales, on hopes of a boost from the agreement.

Earlier this year, Domino’s new CEO for Ireland, Scott Bush, said the company wants to accelerate growth here in the next two to three years, both in terms of outlets and employee numbers.

The growth strategy for Ireland will include further regional expansion, improved levels of local sourcing of ingredients, a more innovative menu, quicker delivery times, and a stronger targeting of off-peak time sales.

An expanded supply chain facility is also due to open in Naas.

Domino's Ireland generated revenues of £26.8m (€31m) last year, down slightly on the previous 12 months.

• additional reporting Reuters