Understanding Domino’s Business Model With Revenue Channels

By Author: Smith Joe
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In a world where “comfort” is the king and hunger waits for one, Domino’s has revolutionized how we satisfy our quench for pizza. The company has been making headlines since its launch and now has become a “go-to” place for all pizza lovers. Along with scrumptious taste lies in cheesy creation, there is a robust business model that has made the company successful and a name at the global level. 
 
Domino’s is not just making pizzas; it's delivering a masterclass in how to grow in the saturated and competitive landscape of the fast food industry. 
 
Launched as a humble pizza parlour in a small town, Domino’s has now become a global pizza powerhouse and this is the reason why more and more entrepreneurs want to get insight into Domino’s business and revenue model. From implementing technological innovations to online delivery to kiosks, Domino’s has created a blueprint for businesses seeking to enter this field. 
 
Want to know more? Let’s join us, exploring its business model and its secret sauce that ...
... makes Domino’s a global player in no time. 
An Overview of Domino’s 
 
A chain of pizza restaurants called Domino's Pizza Inc. (Domino's). Through its eateries, it offers dine-in and online pizza delivery services as well. 
 
Customers of Domino's can choose from a large selection of pizza products with different crusts and sizes. It also provides a variety of toppings according to nation and culture. 
 
The company operates in the US and other international markets, such as India, the UK, Japan, Mexico, Australia, Turkey, Canada, South Korea, China, and France, through a network of company-owned and franchised stores. The US city of Ann Arbor, Michigan, is home to Domino's headquarters.
 
Indeed, Domino’s is a popular pizza chain delivery restaurant and has come so far by implementing unique marketing strategies, technological innovations and much more. 
Domino’s Exciting Facts and Timeline
 

Brand Name

Domino’s Pizza

Founders 

James Monaghan

Established In

1960

Legal Name 

Domino’s Pizza 

Industry 

Fast Food, Franchising

Employees

13,500

Revenue 

US$4.357 billion (as of 2021)

Number of Locations 

18,848 

Area Served 

Worldwide

Website 

https://dominos.com/ 

 
Now without wasting any time, let’s have a look at the detailed timeline of Domino’s along with some interesting facts and figures. 
 

In Ypsilanti, Michigan, "DomiNick's," a pizzeria, was bought by Tom Monaghan and his brother James in 1960, marking the beginning of Domino's. 
In the year 1965, Tom Monaghan bought two additional pizza eateries and he now had three locations in the same country. 
In 1967, Domino's Pizza launched as a franchise, 
By 1978, it had grown to 200 locations.
In Winnipeg, Manitoba, Canada, on May 12, 1983, Domino's launched its first international location. 
The chain's first location in the UK opened in Luton in 1985. 
Domino's had grown to over 1,000 foreign outlets by 1995. 
Domino's inaugurated its 1,500th overseas site in 1997
By 2014, the company had grown to 6,000 outlets worldwide.
In India, Domino's opened its 1,000th location in February 2016. 
As of October 2019, Domino's Pizza China operated over 250 locations in nine cities.
More than 90% of orders are placed online in China. 
Domino's started trading common stock on the New York Stock Exchange in 2004 under the ticker "DPZ".
In January 2006, Domino's celebrated the opening of its 5,000th American store in Huntley, Illinois.
After two years of falling sales due to COVID-19 lockdowns in Italy.

 
Currently, Domino's Pizza stands as one of the biggest pizza franchises globally, with over 17,000 outlets throughout more than 90 countries. The company's success may be ascribed to both its dedication to quality and client happiness and its creative approach to pizza delivery.
 
How Does Domino’s Operate?
We usually see Domino’s franchise store whenever we roam around the streets. But as we discussed earlier, Domino’s is also ahead in the technological game and implemented an online ordering system for its operation. This dual approach satisfies the unique needs of customers and ensures immense accessibility. 
Domino’s Online Operations
Online Ordering 
Customers can use the official Domino's website or mobile app to place online orders. As a guest, they can place an order or register.
Menu Options
Online clients peruse the interactive menu, choose their desired foods, and then personalize their orders by adding extra toppings, crust variations, and side dishes.
Delivery versus Takeout
Clients can choose to have their orders delivered or to be picked up from the closest Domino's store at a specified location.
Payment Details and Address
Online users safely enter their delivery addresses and payment details using the website or mobile application.
Tracking in Real Time
Domino's provides its online clients with a "Pizza Tracker" tool that lets them see the development of their order in real-time, from preparation to
Confirmation and Delivery 
Customers receive confirmation data after placing an online purchase, and delivery drivers are sent to the designated area to deliver the food.
Review and Ratings
Domino's Online welcomes evaluations and comments from clients, which aids in the company's efforts to raise the calibre and standard of its offerings.
 
This is how online pizza ordering from Domino’s works. In offline operations, customers need to visit nearby Domino’s stores, check the menu, and place an order. Moreover, some stores also have a kiosk where customers can place orders themselves and wait for their turn to collect the food. 
Business Model of Domino’s 
Domino's has a simplified business strategy that focuses on two main avenues: franchised stores and online pizza sales.
Customer Segments
Domino’s serves a large customer base across the globe, having a presence in more than 90+ countries and selling approx. three million pizzas every day. Shocking right? Yes, it is. 
 
The company’s major customer segments comprise: 
 

Individual customers across various demographics and income levels always look out for quick and cost-effective food offerings.  
Groups and families, comprising families with kids 
Event planners, comprising customers arranging large events for occasions or businesses 

 
Domino’s is based in the USA but serves a worldwide customer base. But the interesting fact is it has numerous stores in India with large customer base. 
Value Proposition 
Domino's offers value to its patrons in several ways:
 

Digital ordering: Capitalizing on the desire of most American adults for online pizza ordering, Domino's offers online ordering through a dedicated app and website. The company guarantees prompt delivery with exclusive offers.
Globalization: With operations in over 85 markets across the Americas, Africa, the Middle East, and Asia, Domino's offers a broad reach and accessibility to its renowned pizza offerings.
Order accessibility and ease: Customers may simply place orders over the phone, using an app, or in-store, tailoring their experience to their tastes.
Effective Supply Chain Management: Domino's is proud of its integrated supply chain and flour manufacturing system, which ensures consistency and quality of products offered throughout its franchise locations.

 
Channels 
Domino’s offers customers various channels to place online pizza orders and receive their food at their doorsteps. Below are the main channels Domino’s is using right now. 
 

Online Ordering: Domino’s allows customers the convenience of online ordering, allowing them to customise their toppings and meals before placing an order. 
Quick and Real-time Tracking: Domino’s application comes with various useful features and allows customers to track their orders in real-time in an efficient manner. 
Advertising: Domino’s use various online and offline marketing channels to create a brand image and spread the word about their brand. 
Customer Support:  Domino’s provides customers with a helpline to seek assistance and make inquiries related to their orders. 

 
This is how Domino’s works and establishes a win-win situation for all the stakeholders included. 
How Does Domino’s Make Money?
Selling pizzas to customers and other related items is the key revenue source of the company. The main source of income for Domino’s is selling pizza online and offline, which brings the major revenue to the table. This offers a variety of pizzas with various sizes, toppings and beverages. 
 
Other revenue sources include a delivery fee and franchise fees. 
 
2020 saw royalties and fees overtake company-owned outlets as the US segment's primary revenue sources. The corporation's sales in the US sector amounted to $1.45 billion. The company's US segment saw a net gain in revenue of about $179 million. The table below shows the net revenue breakdown for the company's US segment for the years 2019 and 2020.
 
Revenue at US company-owned stores increased by $32 million, or 7.1%, in 2020 compared to the year before. The main causes of the revenue rise were an improvement in same-store sales and an increase of $10.6 million in the 53rd week. Company-owned same-store sales increased by 11% in 2020.
Conclusive Thoughts
To sum up, Domino’s business approach combines digital supremacy, astute pricing, inventive product development, successful advertising, and tactical alliances delightfully. They have been able to hold onto their status as the world's leading pizza company because of this formula for success. Strong ties have been maintained between Domino's and its franchisees in the US, Canada, and other international markets. 
 
Furthermore, Domino’s business model is a winning combination of a wide menu, ease of use, worldwide reach, clever alliances, inventiveness, and a pleasurable dine-in experience. The next time you enjoy a slice of Pizza, keep in mind that the company has developed a well-thought-out business model that has been refined over time to provide customers with not just delicious food but also an unforgettable experience.
 
If you are thinking of entering the food delivery business, get started with a feature-rich online ordering system and take your business online. After all, who doesn’t like to earn a name like Domino’s? We, all right?