Domino's Pizza Group PLC (LSE:DOM) has settled its long-running dispute with main franchise owners over how the business is funded and profits are split.
The franchisees had complained they weren’t getting enough out of the deal and the new framework will see the takeaway pizza group increase its spending on marketing, store incentives and digitisation by around £3-4m per annum from 2025.
Domino’s said the new agreement underpins its confidence of having 1,600 stores delivering £2.0 billion of systems sales by 2028 and 2,000 stores delivering £2.5bn of system sales by 2033.
The FTSE 250 group added that trading had been in line with forecasts in this (fourth) quarter so far.
In the first 9 weeks of quarter four, total orders are up 5.3% (quarter three: +3.5%) and like-for-like sales are up 2.7% (Q3 24: +0.7%).
“As with other major employers in the UK, the recent UK budget has significantly increased the cost of labour for both DPG and our franchise partners, who are particularly impacted.
“Although we have identified specific mitigation plans, we now believe that the annual impact for DPG will be c.£3m per annum from FY25 onwards.
An additional c.£4-5m per annum will be invested to boost its technology platform and strengthen cyber security, said the statement.
Andrew Rennie, chief executive, commented he was delighted with the franchise deal.
“This new framework is a vital step in driving the future growth of both DPG and our franchise partners.
Having a five-year framework in place provides a strong platform for the long-term, sustainable growth of the brand, and will help us build a larger and more cash-generative business which will deliver stronger returns.”
Shares eased 2% to 344.6p.