Domino’s goes on a Swiss roll for expansion

The group, which has a network of 748 stores in the UK, Ireland and Germany, plans to open at least 25 stores in the country over the next five years after buying the Domino’s master franchise and 12 existing stores.

With internet use in Switzerland higher than in the UK, Domino’s believes there is an opportunity to drive online growth in the same way as its domestic market as consumers order through phone apps and Facebook pages.

It said: “Currently, brand recognition of Domino’s in Switzerland is very low and the existing stores are not heavily marketed.

“The company believes it can take the brand to the next level through an improvement in product quality, innovative marketing and its focus on a great delivery service.”

“Switzerland’s strong economy and metropolitan based population are characteristics well-suited to the development of the Domino’s model,” the company said.

Domino’s is paying an initial five million Swiss francs (£3.3m) for the exclusive right to operate and franchise stores in Switzerland, Liechtenstein and Luxembourg, as well as an option on stores in Austria.

It will pay a further two million Swiss francs (£1.3m) depending on the performance of the 12 stores over a two-year period. The group holds the master franchise to own, operate and franchise Domino’s Pizza outlets in the UK, Ireland and Germany, having opened its first UK store in Luton in 1985.

It acquired the German franchise in April 2011.

Chief executive Lance Batchelor said he saw good potential in Switzerland, given the affluent consumer market.

He added: “The encouraging progress we have seen in our first 16 months in Germany has convinced us this opportunity is one not to be missed.”

Domino’s expected to see a small loss in 2012 as it refurbished and relocated stores but expected the Swiss business to be profitable by 2014, it added.

Last month, Domino’s UK reported first-half profits of £22m and said it was sticking with plans to add 60 new UK stores by the end of the year, plus a further 12 in Germany, which it thinks has the potential to one day be bigger than its British business.