WEBVTT 00:00:00.000 --> 00:00:02.020 Okay, let's just jump right in. When you hear 00:00:02.020 --> 00:00:03.960 the name dominoes, what's the first thing that 00:00:03.960 --> 00:00:06.019 talks into your head? Oh, that's a good question. 00:00:06.599 --> 00:00:09.640 Is it the red and blue dots or maybe the sound 00:00:09.640 --> 00:00:11.939 of a scooter pulling up outside? For me, it's 00:00:11.939 --> 00:00:13.759 that feeling, that nervous energy of watching 00:00:13.759 --> 00:00:16.019 the clock, right? The whole 30 minutes or less 00:00:16.019 --> 00:00:18.440 thing. Exactly. And that's what's so fascinating. 00:00:18.559 --> 00:00:20.260 I mean, for a company that just sells pizza, 00:00:20.420 --> 00:00:24.460 something so, so common, their story is really 00:00:24.460 --> 00:00:27.480 a masterclass in logistics. It's about how a 00:00:27.480 --> 00:00:30.760 ruthless focus on efficiency can build a global 00:00:30.760 --> 00:00:34.310 empire. That's the paradox, isn't it? That's 00:00:34.310 --> 00:00:36.049 what we're looking at today. We are doing a deep 00:00:36.049 --> 00:00:39.030 dive into Domino's Pizza Inc., a company that 00:00:39.030 --> 00:00:45.229 went from one tiny local pizzeria to this multinational 00:00:45.229 --> 00:00:47.649 tech platform that happens to sell food. And 00:00:47.649 --> 00:00:51.130 our dive today, it's based on a really comprehensive 00:00:51.130 --> 00:00:53.530 set of sources that cover everything. We're talking 00:00:53.530 --> 00:00:55.950 its founding history, its global strategy, some 00:00:55.950 --> 00:00:59.289 really wild product changes, and some of the 00:00:59.289 --> 00:01:00.929 most disruptive marketing campaigns I think I've 00:01:00.929 --> 00:01:03.490 ever seen. And our mission for you, the listener, 00:01:03.689 --> 00:01:06.670 is to give you that strategic shortcut. We want 00:01:06.670 --> 00:01:08.670 to get past the toppings and the crust and really 00:01:08.670 --> 00:01:10.310 understand the engineering of their success. 00:01:10.569 --> 00:01:12.409 We're going to uncover those key moments, those 00:01:12.409 --> 00:01:14.530 huge bets they made on speed and technology. 00:01:14.709 --> 00:01:16.769 And crucially, on changing the very definition 00:01:16.769 --> 00:01:18.989 of their own product. Yeah, even when that product 00:01:18.989 --> 00:01:22.109 was facing, I mean, existential criticism. The 00:01:22.109 --> 00:01:24.390 goal is for you to walk away understanding how 00:01:24.390 --> 00:01:26.530 this brand completely dominated the delivery 00:01:26.530 --> 00:01:30.310 market by, weirdly enough, prioritizing the box 00:01:30.310 --> 00:01:33.010 and the journey over what was actually inside 00:01:33.010 --> 00:01:35.370 it. And just to set the stage with the scale 00:01:35.370 --> 00:01:37.730 we're dealing with, Domino's was founded way 00:01:37.730 --> 00:01:41.109 back on December 9th, 1960. It's headquartered 00:01:41.109 --> 00:01:44.069 in Ann Arbor, Michigan, and as of 2024, it has, 00:01:44.269 --> 00:01:49.920 get this, 21 ,366 locations worldwide. Wow. With 00:01:49.920 --> 00:01:52.379 revenue of four point seven one billion dollars. 00:01:52.560 --> 00:01:54.680 That's not just a pizza joint. That is a massive 00:01:54.680 --> 00:01:57.120 global system. It absolutely is. And the story 00:01:57.120 --> 00:01:59.280 of how they built that nearly five billion dollar 00:01:59.280 --> 00:02:01.819 foundation. It starts with some incredibly humble, 00:02:02.019 --> 00:02:04.159 almost desperate high stakes decisions right 00:02:04.159 --> 00:02:06.379 at the very beginning. OK, so let's go back. 00:02:06.500 --> 00:02:09.759 Part one, the Monaghan era. We need to rewind 00:02:09.759 --> 00:02:13.120 to 1960. The very beginning. We start with the 00:02:13.120 --> 00:02:16.340 founders who were brothers, Tom and Jim Monaghan. 00:02:16.750 --> 00:02:19.530 They took over an existing pizza place called 00:02:19.530 --> 00:02:22.530 Dominick's in Ypsilanti, Michigan. It was right 00:02:22.530 --> 00:02:25.479 near Eastern Michigan University. And the money 00:02:25.479 --> 00:02:28.719 they started with was just, it's laughably small 00:02:28.719 --> 00:02:32.780 by today's standards. They put down $500, a $500 00:02:32.780 --> 00:02:34.460 down payment, and then they had to borrow another 00:02:34.460 --> 00:02:37.180 $900 just to get the thing running. Just to buy 00:02:37.180 --> 00:02:39.039 supplies. Yeah, just to get flour and cheese. 00:02:39.120 --> 00:02:40.400 I mean, you're really starting from absolute 00:02:40.400 --> 00:02:43.460 zero there. And what's so incredible about that 00:02:43.460 --> 00:02:46.580 early period is how fast the basic problems of 00:02:46.580 --> 00:02:49.520 the business money, ownership, delivery. It all 00:02:49.520 --> 00:02:51.560 came to a head. It forced a decision. Immediately. 00:02:51.659 --> 00:02:54.139 And that first big decision really foreshadows 00:02:54.139 --> 00:02:56.340 every single strategic move the company would 00:02:56.340 --> 00:02:58.680 make for the next 60 years. So the moment of 00:02:58.680 --> 00:03:01.419 truth comes just eight months in. Jim Monahan, 00:03:01.539 --> 00:03:04.139 he was a full time postman and he just he couldn't 00:03:04.139 --> 00:03:05.979 keep up. The pizza business was just too demanding 00:03:05.979 --> 00:03:08.699 on top of his day job. So Tom Monahan, who's 00:03:08.699 --> 00:03:11.259 now running it all himself, he has to buy his 00:03:11.259 --> 00:03:14.759 brother out, but they have no money. So. What 00:03:14.759 --> 00:03:17.939 do you trade for half of a future pizza empire? 00:03:18.180 --> 00:03:21.379 The answer is almost unbelievable. Jim traded 00:03:21.379 --> 00:03:24.439 his half of the entire business, his entire 50 00:03:24.439 --> 00:03:28.060 % stake, to his brother Tom for the Volkswagen 00:03:28.060 --> 00:03:30.580 Beetle they were using for deliveries. Stop right 00:03:30.580 --> 00:03:33.560 there. That's the whole story, isn't it? It is. 00:03:33.620 --> 00:03:36.620 Think about what that trade means. In 1961... 00:03:37.199 --> 00:03:40.099 The means of delivery, the car, was valued as 00:03:40.099 --> 00:03:42.240 being equal to half the ownership of the entire 00:03:42.240 --> 00:03:44.659 company. So when Tom Monaghan accepted that deal, 00:03:44.819 --> 00:03:47.340 he wasn't just getting full control. He was making 00:03:47.340 --> 00:03:50.719 a statement. His number one priority was the 00:03:50.719 --> 00:03:53.659 delivery vehicle, the logistics. The Beetle was 00:03:53.659 --> 00:03:55.680 the most valuable asset they owned. More than 00:03:55.680 --> 00:03:57.740 the ovens, more than the recipes, more than the 00:03:57.740 --> 00:03:59.560 store itself. Everything else was secondary. 00:03:59.680 --> 00:04:01.719 And that Beetle really became the philosophical 00:04:01.719 --> 00:04:04.659 blueprint for the whole company. They couldn't 00:04:04.659 --> 00:04:07.460 stay Dominic's forever. Right, because by 1965, 00:04:08.020 --> 00:04:10.500 Tom had bought two more pizzerias in the area, 00:04:10.599 --> 00:04:13.199 and he needed a single brand name for all three. 00:04:13.539 --> 00:04:17.120 But the original owner, Dominic DiVarti, he forbade 00:04:17.120 --> 00:04:19.100 him from using the Dominic's name on the new 00:04:19.100 --> 00:04:22.259 stores. So again, necessity forces their hand. 00:04:22.699 --> 00:04:25.120 The sources say an employee, a guy named Jim 00:04:25.120 --> 00:04:26.959 Kennedy, came back from a delivery and just threw 00:04:26.959 --> 00:04:29.779 out the name Domino's. And Monaghan loved it 00:04:29.779 --> 00:04:33.139 instantly. Simple, memorable. So that year, he 00:04:33.139 --> 00:04:35.660 officially renames the business Domino's Pizza, 00:04:35.800 --> 00:04:38.269 Inc. And this is where we see Monaghan's early 00:04:38.269 --> 00:04:40.410 ambition really shine through with the logo. 00:04:40.670 --> 00:04:43.250 The original design had three dots. For the three 00:04:43.250 --> 00:04:45.670 stores they had in 1965. Exactly. And the plan 00:04:45.670 --> 00:04:47.889 was, well, it was wonderfully optimistic. They 00:04:47.889 --> 00:04:49.790 were going to add a new dot for every single 00:04:49.790 --> 00:04:52.110 new store they opened. A plan that shows you 00:04:52.110 --> 00:04:55.269 the boundless energy of a founder, but maybe 00:04:55.269 --> 00:04:57.389 not a ton of foresight about just how fast they 00:04:57.389 --> 00:05:00.069 were about to grow. Oh, not at all. It was hilariously 00:05:00.069 --> 00:05:02.009 unsustainable. They had to abandon that idea 00:05:02.009 --> 00:05:03.990 very, very quickly because the growth was just 00:05:03.990 --> 00:05:06.389 explosive. The first franchise opened just two 00:05:06.389 --> 00:05:10.050 years later in 67. And by 1978, they had 200 00:05:10.050 --> 00:05:13.430 stores. Can you imagine a logo with 200 dots? 00:05:13.790 --> 00:05:18.490 Or today, a logo with over 21 ,000 tiny, unreadable 00:05:18.490 --> 00:05:21.110 dots? It just, it would have been a mess. But 00:05:21.110 --> 00:05:23.569 it shows you how fast that franchise model scaled. 00:05:23.870 --> 00:05:25.709 And right in the middle of that growth spurt, 00:05:25.730 --> 00:05:29.370 in the mid -70s, they hit a huge corporate roadblock. 00:05:29.589 --> 00:05:33.899 A lawsuit. A big one. In 1975, Amstar Corporation, 00:05:34.399 --> 00:05:36.920 the company that makes Domino Sugar, sued them 00:05:36.920 --> 00:05:39.300 for trademark infringement. Arguing that the 00:05:39.300 --> 00:05:41.620 names were too similar and would confuse people. 00:05:41.800 --> 00:05:44.459 And this wasn't a quick thing. This legal battle 00:05:44.459 --> 00:05:47.199 dragged on for five years. It wasn't resolved 00:05:47.199 --> 00:05:49.620 until 1980 when the Fifth Circuit Court of... 00:05:55.129 --> 00:05:57.970 They showed this incredible resilience. While 00:05:57.970 --> 00:05:59.910 the lawsuit was happening, while their very name 00:05:59.910 --> 00:06:02.370 was at risk, they didn't stop expanding. Not 00:06:02.370 --> 00:06:04.509 for a second. They just opened 15 new stores 00:06:04.509 --> 00:06:06.910 under a different name. A super practical, temporary 00:06:06.910 --> 00:06:10.209 name, Pizza Dispatch. And as soon as they won 00:06:10.209 --> 00:06:11.949 the case, they just switched the science back. 00:06:12.149 --> 00:06:14.610 They refused to let a legal fight slow down their 00:06:14.610 --> 00:06:17.509 physical, aggressive growth. Speaking of aggressive 00:06:17.509 --> 00:06:20.500 and physical. Yeah. We cannot move on without 00:06:20.500 --> 00:06:23.839 talking about Tom Monaghan's genuinely bizarre 00:06:23.839 --> 00:06:26.800 architectural vision for the corporate headquarters. 00:06:27.180 --> 00:06:31.980 Ah, yes. The famous or maybe infamous Leaning 00:06:31.980 --> 00:06:34.600 Tower of Pizza. This wasn't just an office building. 00:06:35.069 --> 00:06:37.449 This was Monian's ultimate statement piece. It 00:06:37.449 --> 00:06:40.209 was pure ambition. We're talking about a proposed 00:06:40.209 --> 00:06:44.029 30 -story skyscraper slanted at an angle that 00:06:44.029 --> 00:06:46.009 was supposed to be the centerpiece of their corporate 00:06:46.009 --> 00:06:49.470 campus, Domino's Farms, near Ann Arbor. It's 00:06:49.470 --> 00:06:51.970 such a wild contrast, isn't it? A company built 00:06:51.970 --> 00:06:55.209 on cheap, fast, efficient pizza, and the founder 00:06:55.209 --> 00:06:57.730 wants to build this incredibly expensive, high 00:06:57.730 --> 00:07:00.199 -concept architectural monument. The contrast 00:07:00.199 --> 00:07:02.439 is everything. Monaghan was obsessed with the 00:07:02.439 --> 00:07:04.860 architect Frank Lloyd Wright. So his first move 00:07:04.860 --> 00:07:07.439 was to go to Taliesin Associated Architects, 00:07:07.439 --> 00:07:09.740 the firm that carries on Wright's legacy, and 00:07:09.740 --> 00:07:12.660 asked them to base the tower on an unbuilt 1956 00:07:12.660 --> 00:07:15.040 design of Wright's called the Golden Beacon. 00:07:15.180 --> 00:07:17.339 But that fell apart. Yeah, it dissolved pretty 00:07:17.339 --> 00:07:19.240 quickly. Apparently, both sides felt the design 00:07:19.240 --> 00:07:21.279 just wasn't capturing the true spirit of Wright's 00:07:21.279 --> 00:07:24.779 work. So Monaghan pivots. He goes to Gunnar Burkerts, 00:07:24.800 --> 00:07:26.579 who was already designing the main headquarters 00:07:26.579 --> 00:07:29.839 building, which is this unusual half mile long 00:07:29.839 --> 00:07:32.420 low rise structure. And Burkerts comes up with 00:07:32.420 --> 00:07:35.639 this new design, a tower rising at a sharp 15 00:07:35.639 --> 00:07:37.699 degree angle. And the nickname was immediate. 00:07:37.860 --> 00:07:40.120 You couldn't avoid it. The Leaning Tower of Pisa. 00:07:40.720 --> 00:07:43.699 A direct and maybe slightly mocking reference 00:07:43.699 --> 00:07:47.000 to Italy's Leaning Tower of Pisa. It just stuck. 00:07:47.279 --> 00:07:49.899 But here's the ultimate twist in the story. A 00:07:49.899 --> 00:07:53.180 company that made its fortune on speed. and ruthless 00:07:53.180 --> 00:07:56.519 efficiency. It was run by a man willing to spend 00:07:56.519 --> 00:08:00.279 a fortune on this beautiful but completely impractical 00:08:00.279 --> 00:08:02.839 corporate showpiece. So how do you square that? 00:08:03.100 --> 00:08:04.759 Well, you don't. And that's the point. The tower 00:08:04.759 --> 00:08:07.319 was never actually built. Too expensive. Too 00:08:07.319 --> 00:08:09.519 weird. All of the above. It was too much of a 00:08:09.519 --> 00:08:11.399 distraction from the core business of selling 00:08:11.399 --> 00:08:14.360 pizzas. But, and this is the great part, if you 00:08:14.360 --> 00:08:16.699 go to the site in Ann Arbor today, there's a 00:08:16.699 --> 00:08:19.740 50 -foot -tall scale model of it still standing 00:08:19.740 --> 00:08:22.620 there. A monument to unbuilt ambition. Exactly. 00:08:22.860 --> 00:08:24.959 It's the perfect symbol of the Monaghan era. 00:08:25.120 --> 00:08:28.040 Yeah. Huge dreams constantly bumping up against 00:08:28.040 --> 00:08:30.459 the reality of practical logistics. But, you 00:08:30.459 --> 00:08:32.679 know, that founder -led era had to end eventually. 00:08:33.019 --> 00:08:35.539 It did. After 38 years, Tom Monaghan retired 00:08:35.539 --> 00:08:39.700 in 1998. He sold 93 % of the company he built 00:08:39.700 --> 00:08:42.899 to Bain Capital for about $1 billion. Which is 00:08:42.899 --> 00:08:45.720 a staggering exit. And that sale to a private 00:08:45.720 --> 00:08:48.379 equity firm like Bain, that's a huge strategic 00:08:48.379 --> 00:08:50.440 pivot for the company. Oh, absolutely. The focus 00:08:50.440 --> 00:08:52.889 shifts immediately. doesn't it? Completely. Private 00:08:52.889 --> 00:08:55.769 equity firms buy companies to streamline them, 00:08:55.929 --> 00:08:58.129 maximize profits and then usually take them public. 00:08:58.429 --> 00:09:00.809 Monahan was driven by his personal passions like 00:09:00.809 --> 00:09:04.200 architecture. Bain was driven by one thing. ruthless 00:09:04.200 --> 00:09:06.879 financial efficiency. And a year later, Dave 00:09:06.879 --> 00:09:09.279 Brandon was brought in as the new CEO. And that 00:09:09.279 --> 00:09:11.440 really marks the end of the founder era, the 00:09:11.440 --> 00:09:14.340 shift to a professionally managed corporate structure 00:09:14.340 --> 00:09:17.419 that was laser focused on one thing, total market 00:09:17.419 --> 00:09:20.500 domination. And if the Monaghan era was built 00:09:20.500 --> 00:09:22.440 on the philosophy of that Volkswagen Beetle, 00:09:22.559 --> 00:09:25.080 the next chapter was all about weaponizing that 00:09:25.080 --> 00:09:28.320 speed, which led to some pretty profound and 00:09:28.320 --> 00:09:31.360 sometimes tragic consequences. So let's get into 00:09:31.360 --> 00:09:36.669 it. Part two. Speed, safety, and NOID. We have 00:09:36.669 --> 00:09:38.370 to start with the 30 -minute guarantee. This 00:09:38.370 --> 00:09:40.470 wasn't just a marketing slogan. It was the entire 00:09:40.470 --> 00:09:43.389 identity of the company for decades. It was absolutely 00:09:43.389 --> 00:09:45.970 revolutionary for fast food at the time. Starting 00:09:45.970 --> 00:09:49.610 in 1973, Domino's made a simple, powerful promise. 00:09:50.190 --> 00:09:52.779 Pizza delivered in 30 minutes. Or it's free. 00:09:52.899 --> 00:09:55.019 It's brilliant. It creates this instant competitive 00:09:55.019 --> 00:09:57.659 advantage built purely on speed and certainty. 00:09:57.860 --> 00:10:00.019 But it was also incredibly high stakes. You're 00:10:00.019 --> 00:10:02.259 literally creating a financial incentive for 00:10:02.259 --> 00:10:05.019 your drivers to be reckless. In 1987, they tweaked 00:10:05.019 --> 00:10:07.440 it a bit. It became a $3 discount instead of 00:10:07.440 --> 00:10:09.379 a free pizza, but the pressure was still immense. 00:10:09.759 --> 00:10:12.639 And the human cost of that pressure. It became 00:10:12.639 --> 00:10:14.960 tragically clear in the early 90s. The sources 00:10:14.960 --> 00:10:17.779 we have detail some really significant high -profile 00:10:17.779 --> 00:10:19.980 lawsuits that forced the company into a corner. 00:10:20.220 --> 00:10:23.500 And they were not minor cases. In 1992, there 00:10:23.500 --> 00:10:26.759 was a $2 .8 million settlement after a Domino's 00:10:26.759 --> 00:10:29.559 driver who was speeding killed a woman in Indiana. 00:10:30.000 --> 00:10:32.120 That should have been a massive warning sign. 00:10:32.320 --> 00:10:34.600 But the real death blow to the policy came a 00:10:34.600 --> 00:10:38.120 year later, in 1993. Right. A woman was injured 00:10:38.120 --> 00:10:40.500 when a delivery driver ran a red light and hit 00:10:40.500 --> 00:10:43.419 her car. A jury awarded her nearly $80 million. 00:10:43.860 --> 00:10:46.360 $80 million. Now, she eventually accepted a smaller 00:10:46.360 --> 00:10:49.230 payout of $15 million, but still. The message 00:10:49.230 --> 00:10:51.529 was sent. That's the moment where the brand's 00:10:51.529 --> 00:10:55.309 identity speed just violently collides with public 00:10:55.309 --> 00:10:57.710 safety and legal liability. And Tom Monahan, 00:10:57.850 --> 00:11:00.970 who was still CEO, he had no choice. He was forced 00:11:00.970 --> 00:11:03.090 to drop the 30 minute guarantee that year. And 00:11:03.090 --> 00:11:05.250 he specifically cited the public perception of 00:11:05.250 --> 00:11:07.110 reckless driving. They had pushed their core 00:11:07.110 --> 00:11:08.990 strategy right past the breaking point. It had 00:11:08.990 --> 00:11:11.169 become a massive liability. But here's the thing. 00:11:11.230 --> 00:11:13.960 They dropped the guarantee. But speed is still 00:11:13.960 --> 00:11:16.039 in their DNA, right? Oh, absolutely. The current 00:11:16.039 --> 00:11:18.539 U .S. slogan, you got 30 minutes, still links 00:11:18.539 --> 00:11:20.919 at that history. And what's really wild is that 00:11:20.919 --> 00:11:23.919 this exact same high -risk strategy, the one 00:11:23.919 --> 00:11:26.379 deemed too dangerous for the U .S., is still 00:11:26.379 --> 00:11:28.460 active in other parts of the world. That's right. 00:11:28.679 --> 00:11:31.460 The 30 -minute guarantee, with local terms and 00:11:31.460 --> 00:11:33.720 conditions, of course, is still honored in countries 00:11:33.720 --> 00:11:36.799 like Colombia, Vietnam, Mexico, China, and India. 00:11:37.139 --> 00:11:39.019 So what does that tell you about their global 00:11:39.019 --> 00:11:42.100 strategy? It says they have a very flexible and 00:11:42.100 --> 00:11:45.580 maybe cynical approach to risk. What was unacceptably 00:11:45.580 --> 00:11:47.840 dangerous for the American market in the 90s 00:11:47.840 --> 00:11:50.080 is still seen as a winning strategy in certain 00:11:50.080 --> 00:11:52.799 high growth, high density international markets 00:11:52.799 --> 00:11:55.360 today. Different markets, different rules. OK, 00:11:55.440 --> 00:11:59.419 so moving from reckless speed to animated madness, 00:11:59.659 --> 00:12:02.039 we have to talk about one of the strangest and 00:12:02.039 --> 00:12:04.320 most infamous mascots in advertising history. 00:12:04.580 --> 00:12:07.720 The Noid. Ah, the Noid, yes. A character that 00:12:07.720 --> 00:12:10.299 became way more famous and tragically real than 00:12:10.299 --> 00:12:12.399 anyone could have ever planned. So the character 00:12:12.399 --> 00:12:15.779 itself was created in late 1986. The idea was 00:12:15.779 --> 00:12:17.940 that the Noid was the physical embodiment of 00:12:17.940 --> 00:12:19.820 everything that could go wrong with your delivery. 00:12:20.100 --> 00:12:22.899 Cold pizza, late delivery, you name it. And the 00:12:22.899 --> 00:12:25.879 slogan was super catchy, avoid the Noid. It was 00:12:25.879 --> 00:12:29.279 a clever concept, but it got very dark very fast 00:12:29.279 --> 00:12:32.259 because of a real world incident in 1989. Yeah. 00:12:32.649 --> 00:12:35.070 A man named Kenneth Lamar Noid, who was suffering 00:12:35.070 --> 00:12:37.750 from mental health issues, became convinced that 00:12:37.750 --> 00:12:40.570 the mascot was a direct personal attack on him. 00:12:40.710 --> 00:12:43.470 He believed Tom Monaghan was mocking him. So 00:12:43.470 --> 00:12:45.669 you walked into a Domino's in Chambly, Georgia 00:12:45.669 --> 00:12:49.230 with a gun and held two employees hostage for 00:12:49.230 --> 00:12:52.049 over five hours. The standoff ended in such a 00:12:52.049 --> 00:12:55.149 bizarre way. The employees managed to escape 00:12:55.149 --> 00:12:57.830 when Kenneth Noid got distracted because he was 00:12:57.830 --> 00:12:59.789 eating a pizza that he had forced them to make 00:12:59.789 --> 00:13:02.899 for him. The aftermath is just so tragic. Kenneth 00:13:02.899 --> 00:13:04.600 Noid was diagnosed with paranoid schizophrenia, 00:13:05.100 --> 00:13:08.080 found not guilty by reason of insanity, and he 00:13:08.080 --> 00:13:11.320 later died by suicide in 1995. You'd assume the 00:13:11.320 --> 00:13:13.139 company would just scrub the character from existence 00:13:13.139 --> 00:13:15.240 after that. But here's the important clarification 00:13:15.240 --> 00:13:18.019 from the sources. Domino's has always claimed 00:13:18.019 --> 00:13:20.039 that they retired the Noid campaign for business 00:13:20.039 --> 00:13:22.639 reasons and that the decision was not a result 00:13:22.639 --> 00:13:25.059 of the hostage situation. They maintain control 00:13:25.059 --> 00:13:27.409 of the narrative. Exactly. And even though he 00:13:27.409 --> 00:13:29.730 was retired, they weren't totally afraid of the 00:13:29.730 --> 00:13:32.769 legacy. They briefly brought him back in 2011 00:13:32.769 --> 00:13:36.830 for a Facebook game, which is a choice. Wow. 00:13:37.610 --> 00:13:40.129 Speaking of accidental marketing of free pizzas, 00:13:40.250 --> 00:13:42.870 we have to touch on the bailout glitch. From 00:13:42.870 --> 00:13:46.009 March 2009. This was a perfect storm of a new 00:13:46.009 --> 00:13:48.750 digital system and early viral social media. 00:13:49.049 --> 00:13:51.129 Right. So they had a promotional code, the word 00:13:51.129 --> 00:13:53.370 bailout, that was supposed to be turned off. 00:13:53.470 --> 00:13:55.370 Yeah. But it wasn't. Someone found it, shared 00:13:55.370 --> 00:13:57.570 it on a forum. And it just exploded. They ended 00:13:57.570 --> 00:14:00.009 up giving away almost 11 ,000 free medium pizzas 00:14:00.009 --> 00:14:01.590 across the country before they could shut it 00:14:01.590 --> 00:14:03.610 down. It was a massive uncontrolled giveaway. 00:14:03.929 --> 00:14:07.250 But what's key is how they handled it. They immediately 00:14:07.250 --> 00:14:09.649 promised to reimburse all the franchise owners 00:14:09.649 --> 00:14:12.549 for the cost of those free pizzas. It was an 00:14:12.549 --> 00:14:14.289 expensive mistake, but they used it to protect 00:14:14.289 --> 00:14:16.169 their relationship with the franchisees. It kind 00:14:16.169 --> 00:14:18.490 of became this accidental act of goodwill. So 00:14:18.490 --> 00:14:21.590 beyond these more chaotic marketing moments, 00:14:21.809 --> 00:14:23.909 they also did a lot of very intentional, very 00:14:23.909 --> 00:14:27.190 visible sports and community marketing. For sure. 00:14:27.289 --> 00:14:29.950 They were deep into motorsports. They sponsored 00:14:29.950 --> 00:14:32.549 a team in kart racing that won the Indianapolis 00:14:32.549 --> 00:14:36.870 500 in 1990. Then in 2003, they became the official. 00:14:37.470 --> 00:14:40.149 Pizza of NASCAR. Putting their logo on things 00:14:40.149 --> 00:14:42.610 that go fast. It makes sense. But I think their 00:14:42.610 --> 00:14:45.649 most brilliant community project by far was a 00:14:45.649 --> 00:14:48.450 paving for pizza initiative in 2018. Oh, this 00:14:48.450 --> 00:14:50.649 is pure marketing genius. It brings their entire 00:14:50.649 --> 00:14:52.990 story full circle right back to that core mission 00:14:52.990 --> 00:14:56.049 of delivery. They realized that their biggest 00:14:56.049 --> 00:14:58.990 enemy wasn't another pizza chain. It was potholes. 00:14:59.850 --> 00:15:02.429 Potholes were ruining the pizzas during delivery. 00:15:02.889 --> 00:15:05.210 So instead of just dealing with complaints, they 00:15:05.210 --> 00:15:07.590 launched a program to give grants to cities like 00:15:07.840 --> 00:15:11.019 Burbank, California, and Milford, Delaware, to 00:15:11.019 --> 00:15:13.639 actually fix their roads. It's so cynical and 00:15:13.639 --> 00:15:16.320 so brilliant at the same time. They took business 00:15:16.320 --> 00:15:19.340 expense damage products, car repairs, and turned 00:15:19.340 --> 00:15:22.080 it into this huge positive PR campaign. And they 00:15:22.080 --> 00:15:24.399 made sure everyone knew about it. The paved sections 00:15:24.399 --> 00:15:26.779 of road were literally stamped with the Domino's 00:15:26.779 --> 00:15:29.519 logo and the slogan, oh, yes, we did. It literally 00:15:29.519 --> 00:15:31.320 branded the infrastructure. It's incredible. 00:15:31.500 --> 00:15:33.720 They moved beyond just selling a product and 00:15:33.720 --> 00:15:36.759 into selling a solution to a civic problem. But 00:15:36.759 --> 00:15:39.029 while they were mastering the roads and the marketing, 00:15:39.250 --> 00:15:42.289 there was a huge existential problem brewing 00:15:42.289 --> 00:15:45.629 with the actual food. Okay, so part three, the 00:15:45.629 --> 00:15:49.169 product itself. For decades, Domino's was all 00:15:49.169 --> 00:15:51.750 about that operational efficiency, which meant 00:15:51.750 --> 00:15:54.350 the menu had to be incredibly simple. Aggressively 00:15:54.350 --> 00:15:56.870 simple, it was a strategic choice. For the longest 00:15:56.870 --> 00:16:00.070 time, it was one type of crust, two sizes, 11 00:16:00.070 --> 00:16:03.580 toppings, and Coke. That's it. Because anything 00:16:03.580 --> 00:16:05.779 more complicated would threaten the 30 -minute 00:16:05.779 --> 00:16:08.080 promise. Exactly. But the market started to change. 00:16:08.220 --> 00:16:10.019 You have competitors like Pizza Hut offering 00:16:10.019 --> 00:16:12.799 more variety, and Domino's had to react. So in 00:16:12.799 --> 00:16:16.340 1989, they introduced their first big menu expansion, 00:16:16.879 --> 00:16:19.419 deep dish pizza. And that was a massive investment 00:16:19.419 --> 00:16:22.100 for them. A huge one. It cost them $25 million, 00:16:22.399 --> 00:16:25.700 and $15 million of that was just for new perforated 00:16:25.700 --> 00:16:27.980 sheet metal pans to get the crust right. But 00:16:27.980 --> 00:16:30.590 they had to do it. The research showed that 40 00:16:30.590 --> 00:16:33.309 % of customers wanted a thicker trust. And they 00:16:33.309 --> 00:16:35.649 were constantly iterating. That original deep 00:16:35.649 --> 00:16:37.769 dish was eventually replaced by a pan pizza in 00:16:37.769 --> 00:16:40.549 2012. They also experimented with just sheer 00:16:40.549 --> 00:16:43.549 size. In the 90s, they tested something called 00:16:43.549 --> 00:16:46.490 the Dominator. Which was a yard -long pizza cut 00:16:46.490 --> 00:16:49.549 into 30 slices. Pure novelty. It was aimed at... 00:16:49.740 --> 00:16:52.019 Big parties, big families. And then they started 00:16:52.019 --> 00:16:54.480 looking at other food categories to compete in. 00:16:54.559 --> 00:16:57.720 Right. Like chicken. In 2002, they launched Buffalo 00:16:57.720 --> 00:17:00.159 Chicken Kickers. Yeah. They were basically trying 00:17:00.159 --> 00:17:02.879 to steal market share from places like KFC and 00:17:02.879 --> 00:17:05.119 Buffalo Wild Wings. And they got into specialty 00:17:05.119 --> 00:17:08.700 pizzas, too. In 2003, they launched a Philly 00:17:08.700 --> 00:17:11.880 Cheesesteak Pizza, which came with this big partnership 00:17:11.880 --> 00:17:13.900 with the National Cattlemen's Beef Association. 00:17:14.319 --> 00:17:17.480 It was a move to signal. you know, premium ingredients. 00:17:17.799 --> 00:17:20.099 Then came the Brooklyn -style pizza in 2006. 00:17:20.519 --> 00:17:22.980 Thinner crust, cornmeal cut into bigger slices 00:17:22.980 --> 00:17:24.880 you could fold. They were trying to borrow some 00:17:24.880 --> 00:17:27.160 of that authentic New York pizza credibility. 00:17:27.559 --> 00:17:29.779 But the biggest leap was probably in 2008 when 00:17:29.779 --> 00:17:31.880 they launched oven -baked sandwiches. That was 00:17:31.880 --> 00:17:34.950 a direct shot at Subway. And their marketing 00:17:34.950 --> 00:17:37.690 was ruthless. They ran a promotion offering free 00:17:37.690 --> 00:17:41.170 sandwiches to anyone named Jared. Wow. A very 00:17:41.170 --> 00:17:44.109 clear, very aggressive jab at Subway's spokesperson 00:17:44.109 --> 00:17:46.869 at the time. And the expansion just kept going 00:17:46.869 --> 00:17:49.230 right up to the breaking point. In 2009, you 00:17:49.230 --> 00:17:52.390 get American Legends pizzas with 40 % more cheese. 00:17:52.490 --> 00:17:55.329 You get pasta in a bread bowl. And you get Lava 00:17:55.329 --> 00:17:57.869 Crunch cakes for dessert, which they promoted 00:17:57.869 --> 00:18:00.470 by flying 1 ,000 of them in a helicopter near 00:18:00.470 --> 00:18:02.950 Mount St. Helens. All this marketing energy. 00:18:03.500 --> 00:18:06.660 these new products, and yet the core pizza was 00:18:06.660 --> 00:18:09.460 still widely considered to be terrible. And this 00:18:09.460 --> 00:18:12.579 brings us to what is, I think, the most important 00:18:12.579 --> 00:18:15.299 moment in the company's entire history, the ultimate 00:18:15.299 --> 00:18:17.920 admission of fault. It's a turning point. In 00:18:17.920 --> 00:18:20.660 2009, a consumer taste survey from a firm called 00:18:20.660 --> 00:18:23.559 Brand Keys comes out, and the results are just, 00:18:23.599 --> 00:18:26.059 they're devastating. Domino's ranked dead last 00:18:26.059 --> 00:18:28.359 among all the national pizza chains. Tied for 00:18:28.359 --> 00:18:30.920 last. Tied for last with Chuck E. Cheese. Right. 00:18:31.470 --> 00:18:33.990 A place known for animatronic bands and ball 00:18:33.990 --> 00:18:36.990 pits, not for its culinary excellence. For a 00:18:36.990 --> 00:18:39.049 food company, that is an existential crisis. 00:18:39.289 --> 00:18:41.369 Your entire business is built on a product that 00:18:41.369 --> 00:18:43.390 people actively dislike. And for Bain Capital, 00:18:43.470 --> 00:18:46.029 the owners, that had to be the final straw. Absolutely. 00:18:46.130 --> 00:18:48.470 They couldn't market their way out of a fundamental 00:18:48.470 --> 00:18:51.349 product failure. So they did something radical. 00:18:51.470 --> 00:18:53.890 They embraced the criticism. This led to that 00:18:53.890 --> 00:18:56.769 incredible self -critical ad campaign in 2010. 00:18:57.920 --> 00:19:00.339 They literally put their own customers on camera 00:19:00.339 --> 00:19:03.380 saying the crust tasted like cardboard and the 00:19:03.380 --> 00:19:06.140 sauce was like ketchup. I mean, that level of 00:19:06.140 --> 00:19:08.700 public honesty from a major corporation was just 00:19:08.700 --> 00:19:11.000 unheard of. Instead of fighting the criticism, 00:19:11.299 --> 00:19:13.440 they owned it. And they used it to announce they 00:19:13.440 --> 00:19:15.279 were completely reinventing their pizza from 00:19:15.279 --> 00:19:16.880 the crust up. So they changed everything. The 00:19:16.880 --> 00:19:18.980 dough, the sauce, the cheese. It was a massive 00:19:18.980 --> 00:19:21.859 system -wide overhaul. And it was a formal admission 00:19:21.859 --> 00:19:24.960 that their decades -long focus on delivery speed 00:19:24.960 --> 00:19:27.279 had come at the expense of the food itself. It 00:19:27.279 --> 00:19:29.000 was a huge risk, though, wasn't it, to basically 00:19:29.000 --> 00:19:30.859 tell your customers, hey, that stuff we've been 00:19:30.859 --> 00:19:32.759 selling you for years, yeah, it was bad. Please 00:19:32.759 --> 00:19:35.019 try the new stuff. A colossal. risk, but the 00:19:35.019 --> 00:19:37.980 results were immediate and spectacular. The very 00:19:37.980 --> 00:19:42.339 next year, the company saw a 14 .3 % quarterly 00:19:42.339 --> 00:19:46.099 gain. It completely validated the strategy. Honesty 00:19:46.099 --> 00:19:48.319 combined with a real product improvement was 00:19:48.319 --> 00:19:51.140 the key to unlocking new growth. It proved the 00:19:51.140 --> 00:19:53.380 underlying strength of their delivery model. 00:19:53.480 --> 00:19:57.059 Once the pizza was just, you know. good, the 00:19:57.059 --> 00:19:59.740 convenience engine took over and sales exploded. 00:19:59.980 --> 00:20:03.160 That lesson about adaptation wasn't just limited 00:20:03.160 --> 00:20:05.640 to the U .S. recipe. Not at all. It became their 00:20:05.640 --> 00:20:09.480 global playbook. In 2013, for example, Domino's 00:20:09.480 --> 00:20:12.759 in Israel introduced their first ever vegan pizza 00:20:12.759 --> 00:20:16.039 using a soy -based cheese substitute. It showed 00:20:16.039 --> 00:20:18.440 they were willing to cater to very specific local 00:20:18.440 --> 00:20:21.299 dietary needs. Exactly. They learned that quality 00:20:21.299 --> 00:20:23.359 and adaptation meant different things in different 00:20:23.359 --> 00:20:26.319 markets. And that successful pivot really becomes 00:20:26.319 --> 00:20:29.519 the bridge from their U .S. survival story to 00:20:29.519 --> 00:20:31.859 their incredibly complex and often contradictory 00:20:31.859 --> 00:20:34.359 global expansion. OK, let's talk about that global 00:20:34.359 --> 00:20:36.400 jigsaw puzzle. Part four. I mean, the scale of 00:20:36.400 --> 00:20:38.000 their international operation is just staggering, 00:20:38.140 --> 00:20:40.400 but it started pretty early, right? It did. The 00:20:40.400 --> 00:20:42.420 first international store was in Winnipeg, Canada, 00:20:42.579 --> 00:20:45.089 back in 1983. And then they really... pushed 00:20:45.089 --> 00:20:47.809 into major established economies. The UK and 00:20:47.809 --> 00:20:50.990 Japan both opened in 1985. And they scaled so 00:20:50.990 --> 00:20:54.170 fast. By 1995, they had 1 ,000 international 00:20:54.170 --> 00:20:56.829 locations. And the pace just kept accelerating. 00:20:57.190 --> 00:21:00.210 The sources mentioned this one day in 1997, where 00:21:00.210 --> 00:21:02.250 they opened seven new stores on five different 00:21:02.250 --> 00:21:04.430 continents. On the same day. On the same day. 00:21:04.470 --> 00:21:07.450 It was a pure logistical flex, a message to the 00:21:07.450 --> 00:21:09.769 world that they were everywhere. And the way 00:21:09.769 --> 00:21:11.769 they managed that growth was through the master 00:21:11.769 --> 00:21:15.289 franchise model, which is... It's pretty complex. 00:21:15.470 --> 00:21:18.150 There are these two big public -created groups 00:21:18.150 --> 00:21:21.049 outside of the U .S. parent company. Right. First, 00:21:21.150 --> 00:21:23.109 you've got the Australian group, Domino's Pizza 00:21:23.109 --> 00:21:26.609 Enterprises, or DPE. They control a huge territory, 00:21:26.950 --> 00:21:29.690 Australia, New Zealand, Japan, France, a lot 00:21:29.690 --> 00:21:31.410 of Europe. They're all about aggressive growth. 00:21:31.609 --> 00:21:33.470 And then there's the British group, Domino's 00:21:33.470 --> 00:21:36.210 Pizza Group, DPG, which handles the U .K. and 00:21:36.210 --> 00:21:39.450 Ireland. And it's this web of overlapping franchises 00:21:39.450 --> 00:21:41.990 that allows them to delegate all the local decision 00:21:41.990 --> 00:21:44.609 making, the advertising, the ingredients, the 00:21:44.609 --> 00:21:47.829 labor laws to regional experts. And before we 00:21:47.829 --> 00:21:49.490 get into specific countries, we should mention 00:21:49.490 --> 00:21:51.529 their corporate responsibility push. Yeah. In 00:21:51.529 --> 00:21:54.170 2020, they committed to sourcing 100 percent 00:21:54.170 --> 00:21:57.609 cage free eggs by 2025. Which is pretty much 00:21:57.609 --> 00:21:59.710 a non -negotiable standard for a global chain 00:21:59.710 --> 00:22:01.890 of their size these days. OK, let's zoom in on 00:22:01.890 --> 00:22:04.109 Asia. Because this is where you really see the 00:22:04.109 --> 00:22:07.670 need for that intense local customization. Let's 00:22:07.670 --> 00:22:10.329 start with India. India is the crown jewel of 00:22:10.329 --> 00:22:12.789 their international operations. Outside of the 00:22:12.789 --> 00:22:15.130 United States, India has more Domino's locations 00:22:15.130 --> 00:22:17.529 than any other country in the world. The numbers 00:22:17.529 --> 00:22:20.710 are incredible. As of 2018, the master franchise 00:22:20.710 --> 00:22:24.309 heir, Jubilant Foodworks, had over 1 ,300 stores 00:22:24.309 --> 00:22:28.470 in more than 260 cities. They hit their 1 ,000th 00:22:28.470 --> 00:22:31.250 store back in 2016. And they succeeded because 00:22:31.250 --> 00:22:33.309 they adapted so well. They have a huge number 00:22:33.309 --> 00:22:35.490 of vegetarian options. They use local spices. 00:22:35.710 --> 00:22:38.509 But they still leverage that core model of fast, 00:22:38.549 --> 00:22:41.329 reliable delivery in these incredibly dense cities. 00:22:41.750 --> 00:22:44.029 So India is a story of successful adaptation. 00:22:44.829 --> 00:22:48.309 But China? China is a story of radical invention. 00:22:48.490 --> 00:22:50.849 A completely different strategy. In China, where 00:22:50.849 --> 00:22:52.920 they're known as Damile, They have a smaller 00:22:52.920 --> 00:22:55.859 footprint, about 250 stores in nine big cities. 00:22:55.960 --> 00:23:00.180 But the menu, the menu is almost unrecognizable 00:23:00.180 --> 00:23:01.900 to an American customer. We're talking potato 00:23:01.900 --> 00:23:04.960 bacon pizza, crayfish pizza. Durian pulp pizza. 00:23:05.240 --> 00:23:09.019 Durian pizza. And salted egg yolk pizza. And 00:23:09.019 --> 00:23:10.980 this isn't just a gimmick. This is a profound 00:23:10.980 --> 00:23:14.200 strategic choice. The master franchise model 00:23:14.200 --> 00:23:17.079 gives them the freedom to completely betray the 00:23:17.079 --> 00:23:19.859 core product identity if it means winning over 00:23:19.859 --> 00:23:22.359 local tastes. They care more about capturing 00:23:22.359 --> 00:23:24.619 the market than they do about brand consistency. 00:23:25.140 --> 00:23:28.039 What's also key in China is the tech focus. Over 00:23:28.039 --> 00:23:30.819 90 percent of orders are placed online through 00:23:30.819 --> 00:23:33.220 their own apps or through platforms like WeChat. 00:23:33.559 --> 00:23:35.799 And this is interesting. After years of insisting 00:23:35.799 --> 00:23:38.160 on controlling their own delivery in China, they've 00:23:38.160 --> 00:23:40.180 had to partner with third party apps like Elo 00:23:40.180 --> 00:23:43.599 .me and Meichuan just to compete. A huge strategic 00:23:43.599 --> 00:23:46.359 shift for them. But the global story isn't just 00:23:46.359 --> 00:23:49.299 about successes. It's also defined by some very 00:23:49.299 --> 00:23:51.559 high profile, very public failures. And there 00:23:51.559 --> 00:23:54.200 is no bigger failure or bigger irony than their 00:23:54.200 --> 00:23:56.839 attempt to conquer Italy. The birthplace of pizza. 00:23:57.000 --> 00:24:00.579 In 2015, they decided. to go for it, thinking 00:24:00.579 --> 00:24:02.480 their main advantage would be their superior 00:24:02.480 --> 00:24:05.160 delivery model. The assumption was we're faster 00:24:05.160 --> 00:24:07.259 and more reliable than the local mom and pop 00:24:07.259 --> 00:24:10.039 pizzerias. But it proves they didn't really learn 00:24:10.039 --> 00:24:12.359 the global lesson of the 2010 recipe change, 00:24:12.519 --> 00:24:14.779 did they? If your whole model is convenience, 00:24:15.180 --> 00:24:17.000 what happens when everyone else becomes just 00:24:17.000 --> 00:24:18.839 as convenient? That's exactly what happened. 00:24:18.940 --> 00:24:21.779 The local pizzerias, which already had a vastly 00:24:21.779 --> 00:24:24.619 better product, just started using the same delivery 00:24:24.619 --> 00:24:28.119 apps for Glovo, Just Eat, and suddenly Domino's 00:24:28.119 --> 00:24:30.400 convenience advantage was gone. And the main 00:24:30.400 --> 00:24:32.579 reason they failed? The main reason, according 00:24:32.579 --> 00:24:35.400 to the sources, was just crushing, brutally low 00:24:35.400 --> 00:24:38.059 customer ratings. People in Italy thought the 00:24:38.059 --> 00:24:40.579 pizza was terrible. Convenience couldn't make 00:24:40.579 --> 00:24:43.440 up for the massive quality gap. By July 2022, 00:24:43.859 --> 00:24:47.259 every single Domino's in Italy was closed. A 00:24:47.259 --> 00:24:49.700 painful, expensive lesson. And then came the 00:24:49.700 --> 00:24:53.000 Russian exit in 2023. This one wasn't about the 00:24:53.000 --> 00:24:55.339 product. It was geopolitical. After the invasion 00:24:55.339 --> 00:24:57.579 of Ukraine, the franchise operator had to declare 00:24:57.579 --> 00:25:00.039 bankruptcy and pull out. A completely different 00:25:00.039 --> 00:25:02.359 kind of challenge. And what's wild is that the 00:25:02.359 --> 00:25:05.240 Russian network was then bought by a local rapper, 00:25:05.440 --> 00:25:08.359 Tamati, and just slightly rebranded to Domano 00:25:08.359 --> 00:25:10.599 Pizza. It shows how quickly a brand can be co 00:25:10.599 --> 00:25:13.339 -opted when a master franchise is forced to exit. 00:25:13.559 --> 00:25:16.440 And that brings us to the present. In February 00:25:16.440 --> 00:25:19.500 2025. They announced they're closing over 200 00:25:19.500 --> 00:25:22.980 underperforming stores worldwide. And the vast 00:25:22.980 --> 00:25:26.059 majority of those, 172 of them, are in Japan. 00:25:26.240 --> 00:25:29.019 That's a huge red flag. This is a cost -cutting 00:25:29.019 --> 00:25:32.250 move, shedding the weak spots. Japan is a super 00:25:32.250 --> 00:25:35.549 competitive, tech savvy, delivery focused market. 00:25:35.950 --> 00:25:38.009 The fact that they're failing there suggests 00:25:38.009 --> 00:25:40.569 that their model of just being convenient isn't 00:25:40.569 --> 00:25:42.789 enough anymore. The competition has caught up. 00:25:42.829 --> 00:25:44.549 And what's the one market that's actually growing? 00:25:44.710 --> 00:25:47.049 Australia and New Zealand. So they're doubling 00:25:47.049 --> 00:25:48.829 down where the model still works and cutting 00:25:48.829 --> 00:25:50.890 their losses where it doesn't. So if the 30 minute 00:25:50.890 --> 00:25:53.369 guarantee defined the 20th century and the recipe 00:25:53.369 --> 00:25:56.029 change. to find the early 21st. Then the next 00:25:56.029 --> 00:25:58.789 defining leap has to be their full -on radical 00:25:58.789 --> 00:26:01.710 embrace of technology and automation. Okay, so 00:26:01.710 --> 00:26:05.009 final section, digital innovation. Domino's figured 00:26:05.009 --> 00:26:06.690 out pretty early on that they weren't really 00:26:06.690 --> 00:26:09.670 a pizza company. At their heart, they're a logistics 00:26:09.670 --> 00:26:11.930 and software company. And you can see that mental 00:26:11.930 --> 00:26:14.950 shift reflected in their branding. In 2012, they 00:26:14.950 --> 00:26:17.690 officially changed the company name to just Domino's. 00:26:18.160 --> 00:26:20.420 They dropped the word pizza. And they updated 00:26:20.420 --> 00:26:22.079 the logo at the same time. What was the message 00:26:22.079 --> 00:26:24.500 they were sending with that? It was a clear declaration 00:26:24.500 --> 00:26:27.259 of intent. We are more than pizza. It opened 00:26:27.259 --> 00:26:29.019 the door for them to push sandwiches, pasta, 00:26:29.180 --> 00:26:31.420 wings, whatever comes next. It's a name change 00:26:31.420 --> 00:26:33.500 that prepares them for a future that might not 00:26:33.500 --> 00:26:35.559 even be about food, but about pure logistics. 00:26:36.099 --> 00:26:38.759 And then came the tech tools. Online ordering 00:26:38.759 --> 00:26:42.579 started in 2007, but the real game changer was 00:26:42.579 --> 00:26:45.890 the pizza tracker in 2008. The pizza tracker 00:26:45.890 --> 00:26:48.789 was absolute genius. On one level, it's for the 00:26:48.789 --> 00:26:51.130 customer. It shows you the status of your order 00:26:51.130 --> 00:26:53.049 in real time. It doesn't make the pizza come 00:26:53.049 --> 00:26:55.730 faster, but it reduces your anxiety while you 00:26:55.730 --> 00:26:58.130 wait. It gives you a feeling of control. And 00:26:58.130 --> 00:27:00.650 on the other level? Data. Every click, every 00:27:00.650 --> 00:27:03.410 refresh is a data point. They use that massive 00:27:03.410 --> 00:27:05.210 stream of information to optimize everything. 00:27:05.490 --> 00:27:08.309 Staffing, prep times, delivery routes. They turned 00:27:08.309 --> 00:27:11.109 a customer -facing feature into a powerful internal 00:27:11.109 --> 00:27:13.549 efficiency tool. And now they're moving beyond 00:27:13.549 --> 00:27:16.640 tracking. And into full automation. They're trying 00:27:16.640 --> 00:27:19.079 to solve the problem of the human driver once 00:27:19.079 --> 00:27:22.339 and for all. Exactly. In some cities in Germany 00:27:22.339 --> 00:27:24.700 and the Netherlands, they're already using self 00:27:24.700 --> 00:27:26.900 -driving robots from a company called Starship 00:27:26.900 --> 00:27:29.240 Technologies for short distance deliveries. And 00:27:29.240 --> 00:27:31.640 they're testing everything, aren't they? In 2016, 00:27:31.740 --> 00:27:34.599 they did the world's first drone pizza delivery 00:27:34.599 --> 00:27:37.180 in New Zealand. And in the U .S., they have a 00:27:37.180 --> 00:27:39.119 major partnership with a company called Nuro 00:27:39.119 --> 00:27:42.619 to use their R2 self -driving vehicles for deliveries 00:27:42.619 --> 00:27:45.059 in Houston. So they're testing ground robots, 00:27:45.440 --> 00:27:48.259 aerial drones, and autonomous cars all at the 00:27:48.259 --> 00:27:50.859 same time. They are exploring every possible 00:27:50.859 --> 00:27:53.619 path to automation. They're trying to build a 00:27:53.619 --> 00:27:56.579 future where the cost and the risk associated 00:27:56.579 --> 00:27:59.680 with the human driver is massively reduced. It's 00:27:59.680 --> 00:28:01.519 the 30 -minute guarantee without the liability. 00:28:01.960 --> 00:28:04.819 They also got into some, let's see, unique... 00:28:05.069 --> 00:28:06.890 Customer engagement strategies. You mean the 00:28:06.890 --> 00:28:09.150 wedding registry? The wedding registry. And then 00:28:09.150 --> 00:28:11.630 the baby registry. A way to tie their brand to 00:28:11.630 --> 00:28:14.009 these huge emotional life moments. It's all about 00:28:14.009 --> 00:28:16.470 convenience. And we have to talk about the Surprise 00:28:16.470 --> 00:28:19.490 Freeze campaign from 2021. This was a direct 00:28:19.490 --> 00:28:21.569 attack on the delivery apps, right? It was a 00:28:21.569 --> 00:28:24.190 tactical counteroffensive against DoorDash and 00:28:24.190 --> 00:28:28.089 Uber Eats. They gave away up to $50 million worth 00:28:28.089 --> 00:28:31.109 of free items to their own customers. The message 00:28:31.109 --> 00:28:33.619 was simple. Order directly from us and we'll 00:28:33.619 --> 00:28:35.440 reward you. Go through a third -party app and 00:28:35.440 --> 00:28:37.700 you'll just pay extra fees. It was all about 00:28:37.700 --> 00:28:39.779 protecting their direct relationship with the 00:28:39.779 --> 00:28:42.579 customer and, more importantly, protecting that 00:28:42.579 --> 00:28:45.519 valuable first -party data. Okay, before we wrap 00:28:45.519 --> 00:28:47.599 up, let's look at the financials that make all 00:28:47.599 --> 00:28:50.279 of this possible. They went public on the New 00:28:50.279 --> 00:28:52.859 York Stock Exchange in 2004. And they're still 00:28:52.859 --> 00:28:54.960 evolving. They just announced they're moving 00:28:54.960 --> 00:28:57.359 their stock listing to the NASDAQ starting in 00:28:57.359 --> 00:29:00.440 January 2025. Why would they do that? Why move 00:29:00.440 --> 00:29:04.170 from the NYSE? to Nasdaq. It's a signal to investors. 00:29:04.549 --> 00:29:07.390 Nasdaq is seen as the home for technology and 00:29:07.390 --> 00:29:10.089 growth focused companies. It reinforces their 00:29:10.089 --> 00:29:12.690 message. We are a tech company that happens to 00:29:12.690 --> 00:29:15.289 sell food. And the franchise model is the engine 00:29:15.289 --> 00:29:18.269 that funds all this innovation. We got some 2018 00:29:18.269 --> 00:29:20.910 numbers here. Of their 6 ,000 plus U .S. stores, 00:29:21.109 --> 00:29:23.690 almost all of them are franchised. And the average 00:29:23.690 --> 00:29:25.930 store was doing over a million dollars a year 00:29:25.930 --> 00:29:29.230 in sales. And here's the secret sauce. Every 00:29:29.230 --> 00:29:33.049 franchise pays an initial fee, plus a 5 .5 % 00:29:33.049 --> 00:29:36.930 royalty fee and a 4 % advertising fee, both based 00:29:36.930 --> 00:29:40.430 on their weekly sales. So 9 .5 % of every single 00:29:40.430 --> 00:29:42.769 dollar that a U .S. franchise makes goes straight 00:29:42.769 --> 00:29:44.650 back to the parent company. And that's what pays 00:29:44.650 --> 00:29:46.390 for the pizza tracker, the neuro partnership, 00:29:46.690 --> 00:29:49.650 the drone experiments. Every franchisee is effectively 00:29:49.650 --> 00:29:52.890 funding the company's R &D. It's a genius, self 00:29:52.890 --> 00:29:54.990 -sustaining financial model. And they've shown 00:29:54.990 --> 00:29:57.910 they can be flexible. In 2022, when inflation 00:29:57.910 --> 00:30:00.809 hit, they first cut back on deals, which angered 00:30:00.809 --> 00:30:03.430 customers. But they pivoted fast. By September, 00:30:03.670 --> 00:30:05.769 they launched an inflation relief deal offering 00:30:05.769 --> 00:30:08.869 20 % off all online orders. It shows they're 00:30:08.869 --> 00:30:11.089 willing to protect customer loyalty, even if 00:30:11.089 --> 00:30:13.230 it hurts short -term profits. And finally, to 00:30:13.230 --> 00:30:14.950 bring it all back to the beginning, in November 00:30:14.950 --> 00:30:18.940 2022, They added 800 Chevy Bolt electric vehicles 00:30:18.940 --> 00:30:21.960 to their U .S. delivery fleet. From one single 00:30:21.960 --> 00:30:25.039 gas -guzzling Volkswagen Beetle to a fleet of 00:30:25.039 --> 00:30:27.759 800 EVs. It's the perfect illustration of their 00:30:27.759 --> 00:30:30.059 journey from a local pizza joint to a full -scale 00:30:30.059 --> 00:30:32.700 industrialized logistics machine. So when you 00:30:32.700 --> 00:30:34.200 put it all together, what does this whole story 00:30:34.200 --> 00:30:37.500 tell us? I mean, this deep dive shows that Domino's 00:30:37.500 --> 00:30:40.019 built its empire on a foundation of speed, a 00:30:40.019 --> 00:30:42.240 guarantee so powerful it almost destroyed them. 00:30:42.799 --> 00:30:45.039 They survived a near -death experience with their 00:30:45.039 --> 00:30:47.920 own product by doing something terrifying, being 00:30:47.920 --> 00:30:51.000 honest. And now their future depends entirely 00:30:51.000 --> 00:30:53.579 on staying ahead in the tech race, whether that 00:30:53.579 --> 00:30:56.299 means customizing a durian pizza for China or 00:30:56.299 --> 00:30:59.160 launching delivery robots in Germany. So the 00:30:59.160 --> 00:31:01.339 lesson is that you have to be willing to constantly 00:31:01.339 --> 00:31:04.759 criticize yourself, to radically adapt, and to 00:31:04.759 --> 00:31:07.259 pour money into technology just to stay on top. 00:31:07.579 --> 00:31:09.420 You have to be willing to admit your product 00:31:09.420 --> 00:31:11.700 is broken and rebuild it from the ground up. 00:31:11.740 --> 00:31:14.099 That's it, exactly. And that leaves us with a 00:31:14.099 --> 00:31:16.039 final provocative thought for you to chew on. 00:31:16.380 --> 00:31:18.839 Domino's success today still relies on that mix 00:31:18.839 --> 00:31:21.440 of convenience and an acceptable product. But 00:31:21.440 --> 00:31:23.900 as they plan to close 200 stores, which market 00:31:23.900 --> 00:31:26.299 really poses the greater long -term risk for 00:31:26.299 --> 00:31:29.450 them? Is it a super competitive fragmented market 00:31:29.450 --> 00:31:31.509 like Japan where their convenience advantage 00:31:31.509 --> 00:31:34.049 is disappearing? Or is it a new market where 00:31:34.049 --> 00:31:35.930 people just fundamentally reject their food like 00:31:35.930 --> 00:31:37.690 what happened in Italy? And here's the follow 00:31:37.690 --> 00:31:40.029 up. What happens when delivery automation becomes 00:31:40.029 --> 00:31:42.970 universal? When drones and robots make instant 00:31:42.970 --> 00:31:45.609 delivery the standard for everyone? When that 00:31:45.609 --> 00:31:48.029 last logistical advantage is gone, how does that 00:31:48.029 --> 00:31:50.930 change their entire risk calculation? Is a pretty 00:31:50.930 --> 00:31:53.650 good reinvented pizza still good enough to win 00:31:53.650 --> 00:31:56.049 in a world where everyone can deliver in 10 minutes?