A D V E R T I S E M E N T

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#### TXCraig1

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• Posts: 22995
• Location: Houston, TX
« on: October 10, 2013, 09:45:31 AM »
It turns out that Domino's is a pizza ingredient company that also sells pizza. More than half their revenue comes from their supply chain business - selling ingredients to their stores and franchisees. Only 19% comes from actually selling pizza.

"How much dough is that? It's equivalent to about 860,000 pounds a day, or right around the maximum allowed takeoff weight of a loaded Boeing 747-400 Freighter."

http://finance.yahoo.com/blogs/the-exchange/amazing-facts-domino-dough-190950308.html
(HT: Slice)
"We make great pizza, with sourdough when we can, baker's yeast when we must, but always great pizza."
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#### Y-TOWN

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• Posts: 221
« Reply #1 on: October 10, 2013, 10:46:52 AM »
It turns out that Domino's is a pizza ingredient company that also sells pizza. More than half their revenue comes from their supply chain business - selling ingredients to their stores and franchisees. Only 19% comes from actually selling pizza.

"How much dough is that? It's equivalent to about 860,000 pounds a day, or right around the maximum allowed takeoff weight of a loaded Boeing 747-400 Freighter."

http://finance.yahoo.com/blogs/the-exchange/amazing-facts-domino-dough-190950308.html
(HT: Slice)

After reading this article and doing some basic math it could be concluded a typical Domino's store has a store revenue of \$780,000 annually with total costs of 85% or \$663,000. This would leave the store owner a profit of \$117,000 annually.

I really can't get my head around a typical Domino's store owner making \$117,000 annually.

I know we have some store owners on this board. Do these numbers seem correct?
« Last Edit: October 10, 2013, 10:49:29 AM by Y-TOWN »

#### TXCraig1

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• Location: Houston, TX
« Reply #2 on: October 10, 2013, 10:56:20 AM »
Did you include the franchise fee in the total cost?
"We make great pizza, with sourdough when we can, baker's yeast when we must, but always great pizza."
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#### Y-TOWN

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• Posts: 221
« Reply #3 on: October 10, 2013, 11:07:46 AM »
Did you include the franchise fee in the total cost?

No I assumed the fee was included in the reported 85% operating expense

#### TXCraig1

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• Location: Houston, TX
« Reply #4 on: October 10, 2013, 11:19:57 AM »
Don't forget Uncle Sam will take a big piece of that \$117K or whatever it is - FIT, both shares of FICA, Medicare etc. - government shutdown or not.
"We make great pizza, with sourdough when we can, baker's yeast when we must, but always great pizza."
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#### TonyK

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• I Love Pizza!
« Reply #5 on: October 10, 2013, 08:55:46 PM »
The numbers look good to me. Don't forget the store owner would also have a management fee included in those numbers - over and above your 117k estimate.

Regarding the commissary business Dominoes is running - that's also par for the course. It really doesn't cost the franchisee extra due to the buying power and reduced labour cost that they would benefit by head office handling that aspect.

I thought the most interesting thing is that companies like Pizza Hut don't include commissary revenues on their reporting.

Slick buggers must have a separate, non publicly traded, company keeping the commissary profits to themselves- sweet!

#### TXCraig1

• Supporting Member
• Posts: 22995
• Location: Houston, TX
« Reply #6 on: October 10, 2013, 11:48:56 PM »
I thought the most interesting thing is that companies like Pizza Hut don't include commissary revenues on their reporting.

Slick buggers must have a separate, non publicly traded, company keeping the commissary profits to themselves- sweet!

If they own 50%+ of any business, they would have to issue consolidated financials. If they owned 20%+ of a business, you would at least see it in the Notes to the financial statements.
« Last Edit: October 10, 2013, 11:51:15 PM by TXCraig1 »
"We make great pizza, with sourdough when we can, baker's yeast when we must, but always great pizza."
Craig's Neapolitan Garage

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