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Taste Secures Exclusive Master Franchise Rights for Domino’s Pizza
TASTE HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 2000/002239/06)
Share code: TAS ISIN: ZAE000081162
(“Taste” or “the Group”)
TASTE SECURES EXCLUSIVE MASTER FRANCHISE RIGHTS FOR DOMINO’S PIZZA
Introduction
The board of directors of Taste (“Board”) is pleased to announce that Taste Food Franchising Proprietary
Limited (“TFF”), a wholly owned subsidiary of Taste, has signed an exclusive 30-year Master Franchise
Agreement (“MFA”) with Domino’s Pizza International Franchising Inc. In terms of the MFA, TFF holds the
exclusive rights to develop the international Domino’s Pizza brand, initially in seven Southern African
countries, namely South Africa, Lesotho, Swaziland, Namibia, Botswana, Zimbabwe and Mozambique.
Zambia and Malawi will follow on the fulfilment of certain conditions.
Background to Domino’s Pizza
Domino’s Pizza is considered the world’s largest and most established international pizza delivery brand with
over 10 800 owned and franchised outlets in over 70 countries. The brand delivers more than one million
pizzas a day worldwide and is the market leader in 38 markets around the world including the United
Kingdom, Australia, India, Mexico, France, Turkey and South Korea. Impressively, its international division
has had positive same-store sales growth for 20 consecutive years. Domino’s Pizza is also the worldwide
pizza leader in online ordering and tracking technology, consistently being in the top five companies in the
world by number of online transactions, sharing company with the likes of Amazon and Apple. It has total
system wide sales of $8 billion, and is listed on the New York Stock Exchange.
The Domino’s Pizza brand, which is synonymous with outstanding quality products, friendly service and
unbeatable delivery standards will form part of the growing Taste stable of brands and will become the
Group’s leading pizza franchise offering as existing Scooters Pizza and St Elmo’s franchisees will be given
the opportunity and assistance to convert their stores to Domino’s Pizza stores in order to be part of the
world’s largest pizza delivery brand. Both Scooters Pizza and St Elmo’s are based on similar principles and
operating standards to those of Domino’s Pizza. Scooters Pizza pioneered the "39 minutes or it's free"
delivery promise in South Africa and it is this culture of on-time delivery of quality products that makes the
conversion to the worlds’ leading pizza delivery brand such a good fit.
Rationale
This is a long-term strategic decision that ultimately benefits Taste franchisees as being part of a global and
world-class brand provides access to a myriad of global resources including best operating practices, new
product pipelines and very importantly, access to the Domino’s Pizza leading global online ordering platform.
It will also see the introduction of centralised fresh dough production, adding further volume to the Taste
supply chain as well as simplifying in-store operations and improving consistency of the key pizza product –
dough. Through the conversion and consolidation of the Scooters Pizza and St Elmo’s stores to Domino’s
Pizza stores (“Store Conversions”), the opening of new Domino’s Pizza outlets, and the investment by both
Taste and Domino’s Pizza, Taste plans to, in the next five years, establish Domino’s Pizza as the leading
pizza delivery brand in Southern Africa.
Timeline and effect on Taste
Store Conversions and new Domino’s Pizza store openings are planned to start towards the end of this
financial year. Consequently, no new Scooters Pizza or St Elmo’s stores will be opened for the next few
months although new franchisee applications for new Domino’s Pizza stores will be accepted.
It is anticipated that there will be once-off costs relating to the initial Store Conversions, establishment of the
centralised dough production facility and initial training and marketing. However, being part of a global brand
and with an entirely re-imaged store network, increased marketing spend and the consumer interest in a new
global brand, will contribute positively to store sales and overall market share. The conversion to Domino’s
Pizza gives the brand a solid foundation of over 125 outlets on which to add new Domino’s Pizza stores the
goal being to, in the next five years, establish Domino’s Pizza as the leading pizza delivery brand in
Southern Africa.
The MFA is subject to certain conditions which are currently in the process of being met.
About Domino’s Pizza®
Founded in 1960, Domino’s Pizza is the recognised world leader in pizza delivery, with a significant business
in carryout pizza. It ranks among the world’s top public restaurant brands with its global enterprise of more
than 10,800 stores in over 70 international markets. Domino’s had global retail sales of over $8.0 billion in
2013, comprised of nearly $3.8 billion in the U.S. and over $4.2 billion internationally. In the fourth quarter of
2013, Domino’s had global retail sales of over $2.5 billion, comprised of over $1.1 billion in the U.S. and
nearly $1.4 billion internationally. Its system is made up of franchise owner-operators who accounted for over
96% of the Domino's Pizza stores as of the fourth quarter of 2013. The emphasis on technology innovation
has helped Domino’s reach an estimated $3 billion annually in global digital sales. Domino’s generated
approximately 40% of sales in the U.S. from its digital channels in 2013, helped by the introduction of
ordering apps for iPhone®, Android™, Windows Phone 8® and Kindle Fire™. Domino’s ordering apps now
cover nearly 95% of the U.S. smartphone market. Continuing its focus on menu enhancement, Domino’s
established itself as a player in the pan pizza market with the launch of its Handmade Pan Pizza, featuring
fresh, never-frozen dough, in October 2012.
Johannesburg
10 April 2014
Sponsor
Merchantec Capital
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