4th Feb 2019 17:25
LONDON (Alliance News) - Domino's Pizza Group PLC faces a growing rebellion from its UK franchisees, who claim they don't receive a fair share of profit, The Times reported Sunday.
According to the newspaper, almost all of the franchisees are believed to be refusing to open stores for the first half of this year.
The Domino's Franchisee Association has secured the support of about 90% of the 56 franchisees, The Times reported, saying association members are prepared to not open stores and have agreed to boycott the company's annual awards next month, meaning the event is likely to be cancelled.
"The board has no intention of changing the terms...as they are fair to both parties and delivered record profits of GBP138.2 million for franchisees in 2017," Domino's responded, according to the newspaper.
https://www.thetimes.co.uk/article/dominos-franchisees-unhappy-with-boss-david-wild-halt-new-stores-in-profits-row-rkvnhbkbf
Last week, Domino's Pizza reduced its annual profit expectations following a weak performance of its International unit in the final quarter of 2018.
The FTSE 250-listed company said it now expects underlying pretax profit to be at the lower end of the consensus range of GBP93.9 million and GBP98.2 million. In 2017, Domino's reported underlying pretax profit of GBP96.2 million, so the lower end of the range would represent a 2.4% decline in annual profit.
In mid-October, the company expected to deliver underlying pretax profit for 2018 in the middle of the then range of market expectations of between GBP93.0 million and GBP99.6 million.
The pizza delivery chain said its system sales were GBP339.5 million in the 13 weeks to the end of December 2018, up 5.5% from GBP321.8 million reported for the same period in 2017.
In the UK and Ireland, Domino's said system sales were up 6.2% in the recent quarter. It said franchisees there opened a further 16 stores in the period, taking the total for the year to 58. The company noted that 29 franchisees opened at least one store during the year.
Domino's shares closed down 1.4% at 258.00 pence on Monday.
Related Shares:
Dominos