In an effort to grow its Asian footprint, pizza chain Domino’s (DMP) has locked in Taiwan as the next region on its expansion hit list.
According to a binding agreement with Formosa International Hotels, Domino’s will purchase all of the stores and franchise rights held by Domino’s Taiwan for $79 million in cash.
Domino’s Taiwan is the second largest pizza chain in the country with 138 franchised stores and 19 corporate stores across all major cities, which Domino’s believes can be extended to more than 400 stores over the next 10 years or so.
Last year, Domino’s Taiwan recorded $73 million in sales and generated $4.8 million in earnings before interest, tax, depreciation and amortisation (EBITDA).
“Our expansion focus has been on identifying opportunities with large total addressable markets and a stable economy — we look forward to bringing our High Volume Mentality to this business,” said Managing Director and CEO Don Meij.
With a population of more than 23.5 million people, the addition of the Taiwanese network will expand Domino’s Asian market by at least 18 per cent, to almost 150 million people.
It’s an approach that has previously worked in other regions, like New Zealand and Europe, where Domino’s has been able to work with local experts to build a solid foundation.
“Just as this approach has worked in Europe and more recently in Japan, we intend to apply the same lessons in the new market,” Mr Meij continued.
“Equally we expect to identify and promote high quality management and multi-unit franchisees within Domino’s Taiwan, whose lessons we can apply in other markets.”
The transaction is scheduled to reach completion in the first half of 2022, after which Domino’s said it will expand the Taiwanese store network by opening more corporate stores, introducing new franchisees, supporting existing franchisees and investing in long-term growth.
“This is a people-powered business, and although we may speak different languages, we all speak the language of pizza and customer service,” Mr. Meij added.
Shares in Domino’s finished trading yesterday at $114.05 each.