Domino’s Pizza defends itself

Posted by Andrea Hogan on 13th February 2017

Domino’s Australia has defended its business model after allegations were made it has “squeezed” its franchisees and that some franchisees are underpaying their employees.

In a lengthy report published by Fairfax over the weekend, it was claimed there is widespread underpayment of employees by franchise owners who are struggling to sell cheap pizzas and make a profit. The report includes the story of one man who says Domino’s has not responded to his complaints of employee underpayment in one of its biggest franchisees.

Responding to the report, Domino’s Australia today released a statement to the Australian Securities Exchange (ASX) saying it did not believe the coverage reflected the strong financial performances of its franchise network, the high ethical standards required of its employees and franchisees or the healthy levels of collaboration between the company and franchisees.

“Domino’s works closely with franchisees in relation to marketing, training, technology and administrative support to provide them with the best opportunity for profitability and success. This means the number of these small businesses that did not make a profit in the previous 12 months continues to reduce, to 21 last financial year,” Domino’s said in its statement.

Domino’s continued on to say 87 per cent of its new store owners in the past year came from within the existing Domino’s network and that this was a “strong endorsement of the franchise system”.

Domino’s said that it had a no tolerance system for employee underpayment.

“In the past three years, Domino’s has removed four franchisees, operating seven stores, from our system for deliberately underpaying their employees,” Domino’s said.

Domino’s will be announcing its half yearly financial results on 15 February 2017 and says it “looks forward to clear disclosure around these matters and setting the record straight.”

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