Domino's Pizza Enterprises Limited’s Post

DOMINO's (DPZ) UNREASONABLY PUNISHED Domino's ($DPZ) delivered both good news and bad news yesterday. The US narrative was good--an array of initiatives underway, SSS in the US at plus 4.8% and international SSS of plus 2.1%. Franchisee EBITDA for the year is still tracking to $170K/unit, their goal; the US supply chain margin was up to 11.3% vs. 10.9%, and US company margins were 17.6%, down about 100 bpts but driven by a irregular expense hit (insurance). In my view, DPZ is a whirlwind of positive creativity and initiatives that does and can work. Domino's. It did report a WW decrease in the 2024 net units opened projection from 1100+ to 825-925. Problems with the master franchisee DPE. Based on that, it suspended its LT net unit growth metric. The market (and the algos) punished DPZ, dropping the share price from $478 at 1030a to $409 at market close, a $69/share loss. DPZ lead the exchange as the most down symbol of the day Thursday. I'd point out that a decrease in units opened via master franchisees does not have that great of a revenue or franchisor profit impact. Franchisees typically open all through the year. In fact two great security analysts that I track closely, Sara Senatore (BofA) and Lauren Silberman (DB) both raised 2024 EPS slightly, based on P&L dynamics. Further, suspending the units open guidance because of international master franchisees does not mean that franchise fees and royalty is zero.. Or down that much. With international SSS up 2.1%, we can NOT conclude there is an international problem due to one master franchisee's open/close dynamics. The true impact of the master franchisee fees flowthrough to the brand has to be considered. Due to contract logic, Master franchisees take the majority of the gain or hit. So I'd point out again that good active management and analysis considers all of the important company metrics. Yesterday's market over punishment was noted by analysts on CNBC. Perhaps the algos should use a weighted score of the actual metrics. https://lnkd.in/gfhYCGqA

🍕 Domino's Pizza looks as if it is shifting its focus back to the US market after facing challenges with its international expansion. Despite strong Q2 2024 financial results, with a 7.1% increase in revenue and a 29.8% rise in net income, the company has revised its global store #growth expectations due to difficulties with its master franchisee, Domino’s Pizza Enterprises. The "Hungry for MORE" strategy continues to drive growth in the US, emphasising profitable order count growth across delivery and carryout channels. Read our latest #RevenueRadar report on the pizza giant here: https://lnkd.in/eXMrJ459 #DominosPizza #RevenueGrowth #BusinessStrategy #InternationalExpansion #FinancialPerformance

Domino's Pizza Group PLC (LSE:DOM), the UK’s master franchise, may need to offset softer-than-expected demand with margin growth and store openings as it shifts into the new financial year, analysts reckon. Weak delivery demand in the fourth quarter has left Shore Capital analysts cautious that sales in the transition between the two financial years could be “softer than expected”. However, the broker is confident strong unit openings and second-half cost-driven margin improvements “can more than offset modest downside sales risk”. Analysts believe this could pose an upside risk and therefore maintain a “buy” rating for the stock. Looking forward, Shore Capital expects Domino’s Pizza to issue guidance that targets earnings per share growth of 12% or more and total system sales growth of 10%. More at #Proactive #ProactiveInvestors http://ow.ly/VXWv105l3P4

In an industry that often leans on the franchise model, Cava is forging ahead with its company-operated strategy, in a similar vein to Chipotle, which owns and operates all but 1 of its 3,500+ stores. So, why such a high price tag for a Mediterranean salad chain? Well, investors are generally happy to pay up for two things: profits today or profits tomorrow. Cava promises nore of the latter, with its revenue surging 30% last quarter and ambitious plans to open 1,000 new locations over the next decade, with a portion including higher-margin digital drive-thrus. Expectations will be high for the company's Q2 earnings on Thursday. Source: @Chartr

To all Pizza lovers out there, MOD Pizza is on the Brink of Bankruptcy. They are closing multiple locations due to underperforming stores and financial struggles, possibly leading to bankruptcy. The shift from rapid expansion to profitability focuses on economic challenges affecting the restaurant industry and rising operational costs. The company closed 26 stores in April 2024 across 11 states and D.C. While closing some locations, MOD Pizza still operates hundreds of stores nationwide and is restructuring to improve its financial position. Also, In June 2024, 15 Pizza Hut locations in Indiana abruptly closed, shocking employees and customers. This is part of a more significant conflict threatening 129 additional Pizza Hut restaurants across four states. The situation stems from a dispute between Pizza Hut and a major franchisee, EYM Group, over financial and operational issues. This event highlights the potential instability of the franchise business model, where disagreements between franchisors and franchisees can lead to sudden closures and significant changes in local markets.

Burger King set to Acquire its Largest Franchisee in a Whopper of a Deal. Restaurant Brands International (RBI) acquiring Carrols Corporation, the largest franchisee of its Burger King brand, in a deal valued at $1 billion! As part of the agreement, RBI will invest a whopping $500 million, mainly from Carrols' cash flow, to remodel 600 out of the franchisee's 1,000 restaurants. The acquisition represents a generous 23% premium on Carrols' share price in the 30 days leading up to this announcement. RBI already owned 15% of Carrols' shares since 2012, and this move only improves Burger King's public image. The existing operations team at Carrols will continue running the restaurants, with plans to re-franchise to smaller local operators over a strategic timeframe of five to seven years. “Today’s announcement is a testament to our more than 24,000 Carrols team members who have helped drive the company to record levels of profitability over the past 12 months,” - Carrols Corporation CEO Deborah Derby The deal marks a shift in Burger King's strategy, moving away from the "bigger is better" mindset to focus on smaller operators. This acquisition bolsters the formidable credit of Burger King, and Net Lease Investors & Developers are only going to benefit from this roll-up! Give us a shout for similar NNN updates! ab@realsource.com 949.431.2735 #BurgerKing #RestaurantBrandsInternational #nnnretail #BusinessNews

" Chick-fil-A Restaurants-fil-A hit a milestone in 2023, with systemwide sales reaching $21.6 billion, beating 2022’s total of $18.8 billion. The #fastFood chicken sandwich chain’s sales are nearly $10 billion higher than five years ago, when the brand had an estimated $12.6 billion in 2019. The systemwide sales for 2023 closes some distance between Chick-fil-A and the next brand on the Franchise Times Top 400. In last year’s rankings, Chick-fil-A came in at No. 6, behind the next QSR on the list, No. 4 Burger King, which had $25.5 billion in systemwide sales. The latest systemwide sales tally for Chick-fil-A still trails behind the largest chicken concept, No. 3 KFC, which recorded $31.1 billion." #franchise https://lnkd.in/ePZBPK_K

Company: McDonald's  Founders: Richard and Maurice McDonalds, later bought out by franchise agent Ray Kroc. Year of Establishment: May 15 1940 Headquarters: Chicago, Illnois, United States  Industry: F&B Services: fast food restaurants and real estate Do you know what drives profitability and stability of McDonald's? The answer is real estate. Franchisees pay McDonald's a fee, which includes a percentage of sales and very often rent as McDonald's owns many of the buildings and lands of its outlets. This model generates 82% of McDonald's revenue. What other ways can companies adopt to keep their businesses growing strong after IPO? Find out more in our IPO3 event happening on: 📅 18 June 2024 ⏰ 9am to 1pm Discover how to: 1.Maximise your business valuation. 2.Generate today's cash flow from tomorrow's profit 3.Continue to increase your share price post-IPO. Register to secure your seat via this link: https://lnkd.in/gABR-2yP Whatsapp to 82227413 for further enquiries. #motivationalmonday #ipo #pifcapital #smecapitalenterpreneurship #capitalmarkets

"Unlocking the Secret: McDonald's - More Than Just Burgers, a Real Estate Powerhouse!" 😊                 Have you ever wondered why McDonald's, known for its delicious burgers and fries, is often hailed as more than just a fast-food chain? 🍔🏢 Well, let me tell you a fascinating story behind the golden arches! McDonald's isn't just about serving up tasty meals; it's also a powerhouse in the real estate industry. With a franchise model that's the envy of many, over 90% of McDonald's restaurants worldwide are run by independent franchisees. But here's the kicker: while franchisees pay to use the McDonald’s brand and processes, it's McDonald's itself that owns the land beneath those iconic golden arches. Yes, you heard that right! McDonald's strategically owns thousands of prime real estate properties across the globe. From the bustling streets of New York City’s Times Square to the historic Red Square in Moscow, McDonald's has its footprint in some of the world's most coveted locations. But why does a fast-food giant invest in real estate? Well, it's all about securing a steady revenue stream. While franchisees contribute through sales royalties, a significant chunk of McDonald's revenue comes from leasing out its properties. Think about it: even if the burger business were to slow down, McDonald's would still rake in profits from rent payments. This unique strategy not only secures McDonald's as one of the world's largest commercial real estate operators but also underscores its resilience in the face of changing consumer trends. So, the next time you bite into a Big Mac, remember, that it's not just about the burger; it's also about the real estate beneath your feet. 🌟 #McDonalds #RealEstate #BusinessStrategy #Innovation"

Many people think McDonald’s made it big by flipping burgers, but their financial success is actually the result of flipping business models. When Ray Kroc took over the franchise side of McDonald’s, the business was floundering. Since they just sold licenses, they couldn’t show any significant assets. That meant they couldn’t get loans to fuel growth. Then Ray Kroc met Harry Sonneborn, the financial wizard who became the first President and Chief Executive of McDonald’s Corporation. He told Ray that the business model was all wrong. As Harry saw it, Ray was operating under the misconception that the company was in the food business. He argued that, to be successful, McDonald’s needed to be in the real estate business. He helped Ray raise the money to buy land for the store locations. Then, McDonald’s collected rent from the franchisees in addition to getting the licensing fees. As Harry put it, “The only reason to sell 15¢ hamburgers (yes, that was the price of hamburgers in the 1950’s) is because they are the greatest producer of revenue, from which our tenants can pay us their rent.” The “Sonneborn Model” is considered the most important financial decision in the company’s history. Today, real estate holdings represent about 99% of the company’s assets. It raises the question, “What is your business model based on?” Could you be missing growth opportunities because you are focused on the wrong thing? What are your thoughts? #Influence #BusinessModels #MelindaMarcus #BusinessStrategy #IncreaseRevenue #InfluenceAdvisors #Franchising