Domino's takes 5.5% of sales from each franchised site and bills 5% of revenues for a national advertising fund (it also makes a margin on the foodstuffs it sells franchisees). In the pizza business, this works for Dominos and the franchisee. Domino's head office is constantly innovating because its target audience is constantly changing the way it buys food-to-go. For example, moving from phoning up to ordering on-line, which today accounts for 16% of sales and is growing fast. In the US, Dominos was initially successful because it worked out it was in the logistics business and what mattered was delivering pizzas precisely when you said you would. Today, it has to do more to stay ahead in food-to-go.
True in part to my New Year resolution, I held a business meeting in an independent coffee shop today just next door to a Starbucks. The cafe was presented well and four staff were busy preparing for the lunchtime rush, at 11am. As my guests were late, I had a half hour overview of footfall on the street outside and in the restaurant. Six customers. Barely enough to form the queue in Starbucks or Pret-a-Manger just down the road. Plus one Italian girl who dropped off her CV. Some people stopped to look at the posters in the window and moved on. The owners seemed quite happy. When I left just after 1215, they were doing brisk trade. However, I have the impression that the business is not working hard enough. It could easily have managed 120 customers between 11 and 12, instead of 12. This is lost profit as the fixed overheads and staff costs are already in place. The owners are clearly busy - perhaps too busy to take time to look at the potential that their cafe has. What shou...
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