Do you want to start a restaurant business by buying Domino’s franchise? If YES, here is how much it cost to open a Domino’s franchise and their requirement.
The advantage of buying a Domino’s franchise comes with the company’s ordering system and software that tracks drivers and deliveries. As a matter of fact, Domino’s invests heavily in national marketing and direct-mail marketing campaigns in local markets. They have been able to carve a niche for themselves not just within the United States, but all across the globe.
How Much It Cost to Open a Domino’s Franchise
- Financial Assistance
The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or obligation.
- Financial Requirements
Estimated Initial Investment
- Initial Fee: $0 – $10,000
- Leasehold Improvements: $5,000 – $225,000
- Furniture, Fixtures and Equipment: $62,000 – $145,000
- Signage: $5,200 – $35,000
- 3 Month’s Rent: $3,000 – $25,000
- Security Deposit: $1,000 – $10,000
- Opening Inventory and Supplies: $2,750 – $6,500
- Opening Advertising and Promotion: $0 – $3,000
- Training Expenses: $1,000 – $3,000
- Domino’s PULSE Training Expenses: $1,500 – $1,500
- Insurance: $9,000 – $25,000
- Miscellaneous Opening Costs: $2,500 – $7,000
- Additional Funds – 3 Months: $10,000 – $73,000
- ESTIMATED TOTAL: $102,950 – $569,000
Please note that the initial investment range covers from Non Traditional Stores up to Traditional Stores, including Transitional Stores. Please see FDD for more details.
Aside from the fees listed above, below are other fees you would need to pay if you are interested in buying this franchise;
- Royalty Fee: 5.5 percent of Store’s weekly Royalty Sales.
- Advertising Fund: 4 percent of Store’s weekly Royalty Sales. Non-Traditional Stores and Transitional Stores may receive a partial credit or make a reduced contribution.
- Advertising Cooperatives: 1-4 percent
- PULSE Initial License Fee: $4,923
- Annual Software Enhancement Fee: $582.23 per store per year, after the first year.
- Help Desk/Software Support Services: Currently $32 per call.
- Connectivity Fee: $1,200 per year.
- Google Chrome Access Fee: $130 per device
- Monthly Service Fee for Application Processing: $29.50 per month.
- Technology Transaction Fee: $0.25 per digital order.
- Credit Card Processing Fee: $.04 per transaction (will increase to $.0475 per transaction on 6/17/2019)
- Spanish Language Call Center Program Fee: $2.50 per call, after the first 65 per year
- Inspections: Will vary under circumstances.
- Audit Expenses: Cost of audit, charges of employees, understatement plus 1.5 percent interest per month.
- Transfer: $1,500
- Training Fees: Maximum cannot exceed $1,000 per session.
- PULSE Training: Not to exceed $1,500 plus expenses.
- Interest on Late Payments: Lesser of 1.5 percent per month or highest legal rate for open account business credit in the state Store.
- Charges for Testing and Evaluation: Will vary under circumstances.
- Indemnification: Will vary under circumstances.
- Costs of Enforcement/Non-Compliance: Will vary under circumstances.
Steps on How to Get Domino’s Franchise
If you are cool with the requirements and finance involved in acquiring this franchise, then you would need to follow these steps;
- Fill the application at the website for opening a store. You will need to include your name, address, city and state. You will need a phone number and email address. Then choose the amount of capital you will have to invest. Domino’s maps its franchise locations, and you must first determine if it has a suitable territory available.
This is done by contacting the company through the form found at biz.dominos.com. This form is specific to external candidates who have no association with Domino’s. The external candidates must prove both their financial capability and the ability to learn and operate according to Domino’s internal policies. Domino’s retains the right to approve or deny candidates.
- Wait for the email that confirms that your application was received and being reviewed. This email will tell you if you will be approved for the location. It will also go into more specifics regarding the financing. You will be asked to schedule a time for an associate to call you and talk more.
- Ensure to have your financial papers ready when you have your phone conversation. You must prove your financial capability to Domino’s and pay the franchise fees to open the business. This is possible through a business loan from a financial institution if you do not have the capital on hand.
- Domino’s requires a flat fee of $25,000 to open. It also collects 5.5 percent of sales during the 10-year contract. You can renew this contract after it expires, if desired. You cannot, however, continue operating a franchise without a contract intact. Additionally, you will require capital to purchase or lease the location, purchase the equipment and cover all overhead. This includes the staffing required to operate a business that is open for long hours. A typical franchise will keep $50,000 to $75,000 dollars on hand for day-to-day operations and expenses.
- Note that approval is expected to be quick once you meet the requirements. You should already have a building with all the hookups. After you are approved, the organization will start sending fixtures and merchandise to your building.
- You will then be mandated to attend a workshop at the headquarters before the opening of your store. Here you will learn the mission statement and how to make money selling the merchandise.
Why Buy Domino’s Franchise Instead of Other Restaurant’s Franchise
Some of the benefits you stand to gain when you purchase Domino’s franchise are;
- Training Overview
Franchisees or their owners must complete all training required to operate the Store. The type and duration of the training will depend on whether franchisees have at least 12 consecutive months of current management or supervisory experience within the Domino’s Pizza system and completed Domino’s Pizza High Performance University Crew and Manager Development Programs.
Once franchisees have completed at least 12 consecutive months of recent successful management or supervisory experience within the Domino’s Pizza system and completed Domino’s Pizza High Performance University Crew and Manager Development Programs, franchisees will be required to complete the franchise pre-qualification process.
If qualified, franchisees will be required to complete all of the required tracks of the Franchise Management School (FMS) to obtain Qualified Franchisee Candidate status. If franchisees do not have sufficient prior experience with Domino’s PULSE, Domino’s may require them to successfully complete the training.
The training consists of two days of on-site training. The franchisor also may require that franchisees or their owners complete supplemental or additional training programs which it periodically may offer.
- Territory Granted
Franchisees may operate the store only at a location approved by the franchisor. Franchisees will not receive an exclusive territory under the Traditional store franchise agreement, the Non-traditional store franchise agreement or the Transitional store franchise agreement.
However, under a Traditional store franchise agreement, the franchisee is assigned an area of primary responsibility. The boundaries of the area of primary responsibility will be inserted in the Standard Franchise Agreement when it is signed.
The area of primary responsibility will generally be a one mile radius around the Store, a one mile radius from a street intersection or a written description equivalent to a one mile radius, except that in densely populated areas, it generally will be a ½ mile radius.
During the term of a Standard Franchise Agreement, neither the franchisor nor its affiliates will operate or grant a franchise for a Store whose area of primary responsibility overlaps the area of primary responsibility.
- Obligations and Restrictions
The store must always be under the on-premises supervision of the franchisee or the Controlling Person. The franchisee or the Controlling Person must devote his/her full time as manager of the store or to the management of other stores (or other related activities the franchisor has approved).
Franchisees must offer for sale all products required by the franchisor and make all menu items available for carry-out and delivery from the store. Franchisees may not offer for sale any products that have not been approved. The franchisor can periodically change the types of authorized products.
- Term of Agreement and Renewal
The term of the initial franchise agreement is 10 years for the Standard Franchise Agreement and the Non-Traditional Store Franchise Agreement; and five years for the Transitional Store Franchise Agreement. If franchisees meets certain requirements, the agreements can be renewed for 10 years for the Standard Franchise Agreement and the Non-Traditional Store Franchise Agreement; and one additional five-year term for the Transitional store franchise agreement.
What You Must Know About Domino’s Franchise
Domino’s is a company that was founded in 1963 and they started franchising 2 years later in 1967. Domino’s has her corporate head office at Ann Arbor, Michigan and interestingly, the have an estimated 15,900 franchise units in different locations.
The franchisor, Domino’s Pizza Franchising LLC, offers Domino’s Pizza Store concepts under which the franchisee will operate a Domino’s Pizza Store selling pizza and other authorized products through delivery and carry-out services.
Domino’s Pizza Traditional Stores are retail outlets located primarily in shopping centers, strip centers and similar retail locations with appropriate parking for delivery vehicles and customers of the store. Domino’s Pizza Traditional Stores sell pizza and other authorized products through delivery and carry-out services.
Domino’s Pizza Non-Traditional Stores sell Domino’s pizza and other authorized products and services at non-traditional locations. These locations include office buildings, shopping malls, stadiums, toll roads, airports, zoos, convenience stores and similar retail facilities. Domino’s Pizza Non-Traditional Stores will ordinarily offer only carry-out service but may have sit-down facilities depending on the location.
Domino’s Pizza Transitional Stores are locations where the menu is customized to fit the location. Domino’s Pizza Transitional Stores are located in select markets that have fewer potential customers than Domino’s Pizza Traditional Stores. Domino’s Pizza Transitional Stores generally offer carry-out service only as of the date of the opening of the store and as market conditions materialize. The delivery service will be expanded to the point where full delivery service is offered. At that time the franchisee has an opportunity to convert the Transitional Store to a Domino’s Pizza Traditional Store at the same location or such other location as approved by the franchisor.
Please note that Domino’s Pizza also issues licenses to large public entertainment or similar facility operators, like stadiums or their concessionaires, to sell approved products for a license fee based on facility sales. The Licensee can sell pizza and other authorized products for carry-out service at the facility.
As an internal candidate applying for the franchise of Domino, you will receive preference in the franchise system because you are familiar with the operations and already have a proven knowledge of the systems and company culture. Interestingly, internal candidates even have the opportunity to attend the Franchise Management School, where they learn everything required to open and operate the business.
Another practical tip that can give you an advantage is to follow the alternative route. The alternative route is a partnership between two individuals. One owner can finance the business in a team effort with an existing Domino’s team member. This splits the responsibilities between capital management and operations.