WEBVTT - Domino’s: This Is How A Pizza Chain Stock Did Just As Well As Google 0:00:10.960 --> 0:00:14.880 Hello, and welcome to another episode of the Odd Lots podcast. 0:00:14.920 --> 0:00:19.119 I'm Joe Wisen'tal and I'm Tracy Allaway. Tracy, I have 0:00:19.120 --> 0:00:22.960 a question about the lockdowns or I guess Hong Kong 0:00:23.079 --> 0:00:26.400 never really had all lockdown, did it? Well? So we 0:00:26.440 --> 0:00:29.920 had a lot of bars and restaurants that closed just 0:00:30.000 --> 0:00:32.440 because people weren't going out, But I don't think we 0:00:32.520 --> 0:00:36.560 ever ended up having a formal lockdown exactly like they've 0:00:36.600 --> 0:00:38.560 had in the States, which is kind of weird because 0:00:38.560 --> 0:00:40.600 if you think about it, you know, Hong Kong was 0:00:40.640 --> 0:00:43.480 early to the coronavirus and people were really worried about 0:00:43.520 --> 0:00:45.879 what would happen here. But I guess in the end 0:00:46.000 --> 0:00:47.879 we've we've come out pretty good and we've had like 0:00:48.360 --> 0:00:53.520 a decent experience of the lockdown, So you I guess 0:00:53.560 --> 0:00:56.080 you guys have missed and maybe it would be different 0:00:56.080 --> 0:00:58.800 in Hong Kong. Anyway, this phenomenon of like here in 0:00:58.840 --> 0:01:02.240 the US, like people are ordering pizza like crazy, and 0:01:02.640 --> 0:01:05.360 obviously pizza delivery is one of the big things. But 0:01:05.400 --> 0:01:07.640 I guess I don't know if, like I guess, pizza 0:01:07.720 --> 0:01:09.520 is probably not as big of a cuisine there, but 0:01:09.680 --> 0:01:12.440 without the lockdown, You guys have probably missed this whole 0:01:12.440 --> 0:01:15.479 phenomenon of people just eating tons and tons of pizza 0:01:15.560 --> 0:01:18.760 during this whole crisis, the cultural phenomenon of people ordering 0:01:18.880 --> 0:01:21.039 lots of pizza. You're gonna have to explain this to me, 0:01:21.080 --> 0:01:24.959 because yeah, I've missed this. You don't know. I was thinking, Tracy, 0:01:25.040 --> 0:01:27.600 I was thinking you should you should just move back 0:01:27.600 --> 0:01:30.440 to the US. You can talk about that another time. 0:01:30.480 --> 0:01:33.360 But anyway, it's wait, it's not fair to try to 0:01:33.440 --> 0:01:36.440 leure me back to the US using pizza. That's not fair. 0:01:36.520 --> 0:01:39.520 Come on, al right, Well we'll move on from that. 0:01:39.600 --> 0:01:44.040 But anyway, pizza is booming. In fact, I just last 0:01:44.120 --> 0:01:46.200 night I was on my bike and I biked buy 0:01:46.200 --> 0:01:48.600 a Dominoes and they had this big sign. Maybe i'll 0:01:48.600 --> 0:01:50.480 put it in the post where you post the podcast. 0:01:50.680 --> 0:01:52.920 They had this big sign that's his business is booming. 0:01:53.080 --> 0:01:55.919 We are hiring. People are ordering a lot of pizza 0:01:56.000 --> 0:01:58.920 these days. One other question, have you read the novel 0:01:59.000 --> 0:02:03.080 snow Crash by Neil Stevenson Snow Crash, No, I haven't. 0:02:03.120 --> 0:02:06.680 That's that. It's a sci fi book. I want to say, right, 0:02:07.440 --> 0:02:09.160 I haven't read it. Yeah, it's kind of like a 0:02:09.520 --> 0:02:12.040 it's a cyberpunk novel, so to speak of. There's this 0:02:12.120 --> 0:02:15.640 great line in they're talking about the description of society 0:02:15.720 --> 0:02:18.280 and this future state. He says, there's only four things 0:02:18.280 --> 0:02:23.040 we do better than anyone else. Music, movies, microcode, by 0:02:23.040 --> 0:02:25.640 which you mean software, and high speed pizza delivery. Like 0:02:25.680 --> 0:02:28.640 that is the essentially the U S economy of the future, 0:02:29.120 --> 0:02:31.680 and this world of music, movies, software at high speed 0:02:31.720 --> 0:02:34.240 pizza delivery. It's like I've been thinking a lot about 0:02:34.520 --> 0:02:39.200 snow crash during this crisis. All right, So coronavirus is 0:02:39.320 --> 0:02:44.280 proof of America's dystopian prowess for high speed pizza delivery. 0:02:44.360 --> 0:02:47.040 Is that what you're saying? Yeah, because it's all about 0:02:47.040 --> 0:02:52.720 how like all manufacturing has been outsourced to other countries. Um, 0:02:52.880 --> 0:02:56.960 the US doesn't build anything. There's all these divisions between states, 0:02:57.120 --> 0:03:00.680 and basically everyone is either a coder or eiza delivery 0:03:00.720 --> 0:03:03.720 person in this book, so everyone I should read it anyway. 0:03:04.280 --> 0:03:08.359 One other interesting fact, you know, I mentioned that Domino's 0:03:08.520 --> 0:03:11.320 was booming, and one of my favorite facts is that 0:03:11.880 --> 0:03:16.520 Domino's Pizza came public in two thousand four, about two 0:03:16.600 --> 0:03:20.600 weeks before Google. Did you know that? Yeah, I've seen 0:03:20.680 --> 0:03:22.400 the chart. By the way, can I just say, before 0:03:22.400 --> 0:03:25.160 we go any further, I feel like I feel like 0:03:25.200 --> 0:03:27.359 you could talk about pizza for like a good three 0:03:27.440 --> 0:03:31.239 or four hours if let you like, you've already brought 0:03:31.280 --> 0:03:35.680 in like cyberpunk sci fi fiction and now you're doing uh, 0:03:35.880 --> 0:03:38.760 now you're doing the stock market stuff. Okay, well anyway, Yes, 0:03:38.840 --> 0:03:41.160 I have seen the chart. Anyone who spent any time 0:03:41.200 --> 0:03:44.360 on Twitter has probably seen it as well. It's pretty amazing. 0:03:44.640 --> 0:03:48.240 The basic idea is that both Domino's Pizza and Google 0:03:48.440 --> 0:03:50.720 went public around the same time. I think it was 0:03:50.760 --> 0:03:53.040 two thousand four, and if you look at the chart, 0:03:53.640 --> 0:03:57.200 they've basically had like a pretty similar trajectory. So everyone 0:03:57.240 --> 0:04:00.440 thinks if you invested money in the early two thousands 0:04:00.640 --> 0:04:03.960 in Google, then you haven't made your you know this 0:04:04.120 --> 0:04:07.560 tech genius and you've made millions of dollars. No one 0:04:07.600 --> 0:04:10.200 ever thinks, well, actually, if you put money into this 0:04:10.360 --> 0:04:15.080 simple pizza company, you would have made the same amount. Yeah. 0:04:15.160 --> 0:04:19.800 So Google went public August two thousand four, Dominoes went 0:04:20.040 --> 0:04:24.480 Dominoes went public July or so, barely a month apart, 0:04:25.080 --> 0:04:27.200 and both of them are up about twenty eight and 0:04:27.279 --> 0:04:30.200 a half bold since then, Like it was truly incredible 0:04:30.240 --> 0:04:32.760 that the lines are identical. Anyway, Okay, that is a 0:04:32.760 --> 0:04:35.200 lot of set up. We're going to talk about pizza 0:04:35.279 --> 0:04:37.479 today because I want to get the story of how 0:04:37.520 --> 0:04:42.480 this one company did so well, how pizza company performed 0:04:42.520 --> 0:04:45.120 so well on the market. And I thought, you know, 0:04:45.200 --> 0:04:48.479 with the coronavirus crisis getting everyone to eat pizza, I 0:04:48.480 --> 0:04:50.560 thought this was a good time to sort of talk 0:04:50.600 --> 0:04:54.280 about the incredible story of Domino's Pizza. I feel like 0:04:54.279 --> 0:04:56.320 you've been waiting a long time for this. I feel 0:04:56.320 --> 0:04:58.120 like you have a lot to get off your chest here, 0:04:58.160 --> 0:05:00.360 so let's do it. It's actually done. Want to get 0:05:00.360 --> 0:05:01.800 off my chest. There's just a bunch I want to 0:05:01.800 --> 0:05:03.840 know because I've always been fascinated, but actually don't know 0:05:04.200 --> 0:05:06.919 about the story. Everything I've said so far is the 0:05:06.960 --> 0:05:09.800 extent of my knowledge. But we have a guest that 0:05:09.839 --> 0:05:12.480 knows a lot about the restaurant industry, knows a lot 0:05:12.520 --> 0:05:15.840 about the pizza business. There's a lot about Dominoes in particular. 0:05:16.279 --> 0:05:18.640 I want to bring in Jonathan Mays. He is the 0:05:18.800 --> 0:05:23.880 editor in chief at Restaurant Business Magazine. Jonathan, thank you 0:05:23.960 --> 0:05:26.240 very much for joining us. Thank you. I'm still trying 0:05:26.279 --> 0:05:31.000 to process connecting cyberpunk with pizza delivery. It's still I'm 0:05:31.040 --> 0:05:33.080 trying to register that, so you'll have to excuse me 0:05:33.120 --> 0:05:36.280 for a minute. But it's true, right that people are 0:05:36.360 --> 0:05:40.159 ordering a crazy amount of pizza these days. Yeah, yeah, yeah, 0:05:40.320 --> 0:05:44.040 and uh, it doesn't really matter like all three the 0:05:45.240 --> 0:05:48.520 well probably the fourth, but that the fourth one, Little Caesar's, 0:05:48.560 --> 0:05:50.160 is in public. But if you look at the big 0:05:50.200 --> 0:05:52.839 pizza chains are all doing double digit same store sales 0:05:52.920 --> 0:05:56.800 right now, and um, people are just sitting at home 0:05:57.000 --> 0:06:01.200 and they have all sorts of cash, and where else 0:06:01.240 --> 0:06:03.880 are they going to spend it? Might as well order 0:06:03.880 --> 0:06:07.160 a pizza. Wait, I have a dumb question, and you know, 0:06:07.240 --> 0:06:09.640 forgive me, but I haven't been in the States for 0:06:09.680 --> 0:06:12.279 this crisis, so you know, indulge me. But why pizza 0:06:12.600 --> 0:06:16.480 versus other food delivery? Like, I get that pizza is delicious, 0:06:16.480 --> 0:06:19.120 but it seems like you are both talking about a 0:06:19.160 --> 0:06:23.000 genuine pizza phenomenon here. So why is it so popular 0:06:23.080 --> 0:06:28.400 this time around? Well, all delivery is doing well. So um, 0:06:28.440 --> 0:06:31.440 if you look at whether it's a fast food chain 0:06:31.560 --> 0:06:35.160 or if it's a casual binding, if they do delivery, um, 0:06:35.200 --> 0:06:39.120 you know their delivery sales are way up. Everybody's delivery 0:06:39.120 --> 0:06:42.120 sales are way up. And and the thing about pizzas 0:06:42.160 --> 0:06:44.320 that we just they we can break it out. We 0:06:44.360 --> 0:06:47.599 have the best numbers, we have comparison numbers for for 0:06:47.640 --> 0:06:49.480 pizza chains, and of course they do it better than 0:06:49.520 --> 0:06:53.240 anybody else for the most part. Um, it's a big value. 0:06:53.760 --> 0:06:57.760 So that's kind of the story. Is not necessarily that 0:06:57.920 --> 0:07:00.840 everyone had this crazy craving for pizza. Uh But if 0:07:00.880 --> 0:07:06.680 there's one food in America that long before grub Hub 0:07:06.839 --> 0:07:11.960 or long before seamless or whatever, people have always ordered delivery, 0:07:11.960 --> 0:07:14.680 it's probably a Chinese food is the other one. But 0:07:15.040 --> 0:07:18.920 pizza it's just always been the sort of classic delivery state. Yeah, 0:07:19.000 --> 0:07:22.400 and they've they have the best. They have really good 0:07:22.520 --> 0:07:26.280 uh um set up, They control their delivery drivers, they 0:07:26.320 --> 0:07:29.760 you know, so you know, when it's from a value standpoint, 0:07:29.880 --> 0:07:33.400 it's still you can feed your family for like twenty bucks. 0:07:33.520 --> 0:07:37.000 It's it's uh you know, it's it's a it's all 0:07:37.080 --> 0:07:39.240 really easy to do and and that sort of thing, 0:07:39.240 --> 0:07:43.360 and people are really just accustomed to it. So so 0:07:43.400 --> 0:07:45.920 you mentioned they have a pretty good setup. Can you 0:07:46.080 --> 0:07:50.800 walk us through what makes the pizza delivery industry special, 0:07:51.080 --> 0:07:54.280 how do the economics of that platform or the way 0:07:54.320 --> 0:07:58.280 it actually operates again, how did they differ from other 0:07:58.560 --> 0:08:03.760 food delivery services versus third party delivery or I guess 0:08:03.800 --> 0:08:07.520 even like a Chinese food restaurant that does delivery, Like 0:08:07.640 --> 0:08:12.840 what differentiates the Domino's business model from other food chains 0:08:12.840 --> 0:08:16.720 that might do delivery. Yeah, that's a really good question. 0:08:16.840 --> 0:08:19.400 I mean, I think that there are some other issues 0:08:20.040 --> 0:08:25.000 with you know, Chinese restaurants that have prevented that sector 0:08:25.160 --> 0:08:29.720 from you know, being as sort of as big as 0:08:29.800 --> 0:08:31.440 a pizza chains. And I think a lot of it 0:08:31.480 --> 0:08:33.800 has to do with the process of cooking Chinese food 0:08:33.800 --> 0:08:36.680 and that sort of thing. Everybody eats pizza. It's a 0:08:36.720 --> 0:08:40.040 fundamental value. So you know, you get a pizza from 0:08:40.160 --> 0:08:43.560 from Dominoes, and you know, you it might cost you, 0:08:43.559 --> 0:08:45.240 you know, depending on whether you use a coupon, it's 0:08:45.240 --> 0:08:48.240 going to cost you eight, ten, ten, twelve dollars or whatever, 0:08:48.400 --> 0:08:50.000 and you're going to feed a couple of people at 0:08:50.000 --> 0:08:52.120 the very least, And you know, it's a really hard 0:08:52.200 --> 0:08:54.160 to beat that value. That value is a big deal. 0:08:54.760 --> 0:09:00.439 And it's also from a food cost and point. It's 0:09:00.520 --> 0:09:06.240 it's also fairly inexpensive, and um, that enables these companies 0:09:06.240 --> 0:09:08.240 to do these price deals which help them to do 0:09:08.320 --> 0:09:11.520 these values and uh and and that sort of thing. 0:09:11.640 --> 0:09:15.040 So um, it's enabled these large change to build up 0:09:15.120 --> 0:09:20.160 and build these these fairly sophisticated delivery networks, um all 0:09:20.200 --> 0:09:24.200 across the country, whereas they can't necessarily do it with 0:09:24.520 --> 0:09:42.520 with with Chinese food to the same degree. So I 0:09:42.559 --> 0:09:45.960 want to talk a little bit about, you know, how 0:09:46.000 --> 0:09:48.200 the why the model works so well for pizza, but 0:09:48.320 --> 0:09:50.840 it hasn't worked as well for the third party delivery 0:09:50.840 --> 0:09:53.280 companies that still don't make money and the restaurants seem 0:09:53.320 --> 0:09:55.440 to dislike them. But before we get to that, I 0:09:55.440 --> 0:09:57.720 want to just talk about the pizza change themselves. And 0:09:57.760 --> 0:10:01.960 so you mentioned there's three or were big chains that Domino's, 0:10:02.520 --> 0:10:07.240 Pizza Hut, Papa John's, than Little Caesar's. Tell Us, first, 0:10:07.280 --> 0:10:10.200 just think about the history of this. How did we 0:10:10.320 --> 0:10:14.319 sort of get this, uh, this industry in which all 0:10:14.360 --> 0:10:20.040 around the country pizza became this thing that became a chain, 0:10:20.120 --> 0:10:22.920 which we don't really see the same way again with 0:10:23.120 --> 0:10:26.160 Chinese food or other cuisines, but pizza very much became 0:10:26.600 --> 0:10:31.280 chained and franchised and there's a few dominant players. What 0:10:31.480 --> 0:10:33.320 is like, what is the history of that? And then 0:10:33.320 --> 0:10:34.800 I want to you know, then maybe we can get 0:10:34.800 --> 0:10:38.319 a little bit into what Dominoes did h in particular 0:10:38.400 --> 0:10:42.840 that has stood up. It's it's actually more fragmented than 0:10:43.200 --> 0:10:46.840 say fast fast food. Burger is very very consolidated. Their 0:10:46.880 --> 0:10:50.040 only really just a handful of chains or very I mean, 0:10:50.080 --> 0:10:53.200 you just don't go and see like a drive through 0:10:53.240 --> 0:10:56.040 burger counts an independent drive through burger concept for instance. 0:10:56.080 --> 0:10:58.920 Now lately that's changed because all of these burger restaurants 0:10:58.920 --> 0:11:01.280 have popped up, and that's a thing, but you know, 0:11:01.360 --> 0:11:06.160 pieces still a lot more fragmented um. But the the 0:11:06.320 --> 0:11:10.440 history goes back to what if you recall, it started 0:11:10.440 --> 0:11:14.000 out as these restaurants were dying in concepts, So Pizza Hut, 0:11:14.040 --> 0:11:18.199 for instance, was dying in restaurant um. In the sixties, 0:11:18.200 --> 0:11:21.680 you know, Domino's emerged with this idea that you could 0:11:22.040 --> 0:11:25.480 deliver these pizzas directly to people's homes and they would 0:11:25.520 --> 0:11:29.920 call and then you know, so Dominoes really grew a 0:11:29.920 --> 0:11:33.080 lot in the seventies and in the nineteen eighties, and 0:11:33.080 --> 0:11:36.600 then they had this deal where they would deliver the 0:11:36.640 --> 0:11:39.680 pizza within thirty minutes or it was free, and that 0:11:39.880 --> 0:11:43.600 enabled that company to just you know, that enfranchising, which 0:11:43.640 --> 0:11:47.760 it enables companies to grow very quick, really enabled it 0:11:47.840 --> 0:11:51.520 to grow very fast. And then you had competitors such 0:11:51.559 --> 0:11:54.640 as Little Caesar's which is also based in Michigan, like 0:11:55.160 --> 0:11:58.720 like Dominoes and and um, and then later Papa John's 0:11:58.760 --> 0:12:03.040 sort of emerged. Pizza Hut throughout this process sort of 0:12:03.080 --> 0:12:08.640 started converting its entire business model from that wait staff 0:12:08.720 --> 0:12:12.360 din in concept to a delivery model, you know, and 0:12:12.360 --> 0:12:15.439 it's just sort of became commoditized a little bit from 0:12:15.440 --> 0:12:18.920 a chain perspective. So I mean, you know, you might 0:12:19.000 --> 0:12:21.959 have a favorite between Little Caesar's, Pizza Hut, and Dominoes 0:12:22.040 --> 0:12:25.880 or Papa John's, but you know, unbalanced there not terribly 0:12:25.880 --> 0:12:29.360 different from one another. So it's becomes more of a 0:12:29.440 --> 0:12:34.400 price deal, speed, convenience type factors. So these chains have 0:12:34.440 --> 0:12:37.720 been competing. I mean, they've competed for you know, for 0:12:37.880 --> 0:12:40.720 quality and things like that, but on balance, you know, 0:12:40.800 --> 0:12:43.880 there really isn't a whole lot different between them, so 0:12:43.920 --> 0:12:47.720 they've competed based on price. Price. Competition is very fierce 0:12:47.960 --> 0:12:51.439 in that particular market. They have also been more than 0:12:51.480 --> 0:12:55.880 any other industry. They've been pioneers in adding technology to 0:12:56.160 --> 0:13:00.000 their to their restaurants. So they were very early adopters 0:13:00.080 --> 0:13:02.840 of ordering on the web and then of course mobile 0:13:03.000 --> 0:13:06.160 ordering to you know, to eliminate the pain point of 0:13:06.240 --> 0:13:10.640 having to call your pizza delivery restaurant and wait on 0:13:10.720 --> 0:13:14.040 hold for like ten minutes or whatever. That pain point 0:13:14.120 --> 0:13:16.880 is something that they've been able to to reduce over 0:13:16.920 --> 0:13:20.600 the years and compete then on sort of service and 0:13:20.679 --> 0:13:23.319 speed and things of that nature. That's kind of how 0:13:23.400 --> 0:13:26.360 that works. So I have to say, when I was 0:13:26.400 --> 0:13:29.480 growing up, I'm pretty sure I was a Pizza Hut 0:13:29.960 --> 0:13:35.040 to vote. I distinctly remember, yeah, having birthday parties at 0:13:35.080 --> 0:13:37.679 Pizza Hut, and I remember some of the commercials as well. 0:13:37.679 --> 0:13:39.680 We're gonna have to get our producer to insert some 0:13:39.800 --> 0:13:43.000 old like early nine Pizza Hut commercials into this for 0:13:43.679 --> 0:13:48.720 Nostalgiastic again. Hit Pizza Hut for Spring Pizza loaded with 0:13:48.760 --> 0:13:52.520 six delicious topics like mouth watering pepperonis, mushrooms, and green peppers. 0:13:52.640 --> 0:13:54.959 Right now, get a medium spring for seven and any 0:13:55.000 --> 0:13:58.920 other medium for just more bucks more. Yeah, I gotta 0:13:58.960 --> 0:14:02.600 think there's almost nothing Tracy that makes me more nostalgia 0:14:02.640 --> 0:14:05.240 than thinking about like going to pizza hut with my 0:14:05.320 --> 0:14:08.760 family and like those I remember the I think you know, 0:14:08.840 --> 0:14:11.720 the table clause and anyone and everything go on. But 0:14:11.760 --> 0:14:14.040 that is I think we both have a very nostalgic 0:14:14.120 --> 0:14:18.079 experience about pizza huts as a kid, for sure. Um 0:14:18.280 --> 0:14:21.080 oh gosh, really, I'm getting flashbacks to didn't they have 0:14:21.160 --> 0:14:26.120 like a Land Before Time dinosaur puppet promotion at some point? Okay, 0:14:26.120 --> 0:14:30.120 I'm getting really specific. Um, Jonathan, you mentioned the idea 0:14:30.240 --> 0:14:34.880 of um tech fitting neatly into the pizza delivery business model. 0:14:35.200 --> 0:14:39.960 Can you explain how that worked out for Domino's specifically? 0:14:40.160 --> 0:14:43.480 Like what was Domino's edge? Was it the way they 0:14:43.520 --> 0:14:46.960 did business, the way they used technology, or was it, 0:14:47.080 --> 0:14:52.200 you know, God forbid the pizza itself. Um, well, that's 0:14:52.200 --> 0:14:55.760 a that's a really interesting question because you know, the 0:14:55.880 --> 0:14:59.920 entire sector is actually fairly good at us use of technology. 0:15:00.080 --> 0:15:03.000 I mean, Papa John's has had you know, roughly the 0:15:03.080 --> 0:15:07.400 same digital ordering percentages as Dominoes for years. What what 0:15:07.480 --> 0:15:12.680 Domino's does differently, first off is, and this probably does 0:15:13.120 --> 0:15:16.800 does as much to explain why they have succeeded to 0:15:16.840 --> 0:15:20.480 the extent that they have is they roughly around the 0:15:20.520 --> 0:15:25.720 time they went public, they Dominoes required their franchisees to 0:15:26.040 --> 0:15:29.440 adopt the company's own point of sales system. Uh and 0:15:29.480 --> 0:15:33.000 it was actually a controversial step at the time because 0:15:33.080 --> 0:15:36.480 franchise in a franchise world, the franchise ease a lot 0:15:36.520 --> 0:15:39.760 of times when it comes to a technology or some 0:15:39.800 --> 0:15:44.360 construction requirement that they have to spend, they will want 0:15:44.960 --> 0:15:49.720 the company to give them the requirements and then they 0:15:49.760 --> 0:15:52.560 go shop around for a point of sales system. And 0:15:52.600 --> 0:15:56.040 there was there was, in fact, a very large lawsuit 0:15:56.160 --> 0:16:00.400 from some franchise ease against Dominoes over this poss them 0:16:00.520 --> 0:16:05.040 domino Is ultimately one, and then the franchise started converting 0:16:05.080 --> 0:16:08.720 their POLS system to two Domino system. So what what 0:16:08.840 --> 0:16:12.880 that's given the company is the ability to control the 0:16:13.040 --> 0:16:16.760 entire ordering process without having to actually go to another company. 0:16:16.800 --> 0:16:21.480 So if they want to add functionality to their mobile 0:16:21.840 --> 0:16:26.400 or online ordering, they simply can simply do it and 0:16:26.520 --> 0:16:29.640 do it very easy, relatively easily or more easily than 0:16:29.680 --> 0:16:32.600 most companies. So that's enabled them to do things such 0:16:32.600 --> 0:16:37.120 as add ordering on a watch or ordering your pizza 0:16:37.120 --> 0:16:40.120 on a car, or instance, if you want to order 0:16:40.200 --> 0:16:43.200 from a from an Amazon Echo or something like that. 0:16:43.320 --> 0:16:46.400 So that's the probably the biggest thing that they did. 0:16:46.840 --> 0:16:49.840 The other thing is that they marketed it by adding 0:16:50.040 --> 0:16:52.800 all of these cool things such as ordering on a 0:16:52.800 --> 0:16:57.240 car or whatever. They marketed the idea that you know 0:16:57.280 --> 0:16:59.840 that they're ordering process was easy. So one of the 0:17:00.000 --> 0:17:04.920 biggest things they probably did was convinced customers that they 0:17:04.920 --> 0:17:07.880 are more tech savvy than anybody else. They were doing 0:17:08.200 --> 0:17:11.119 double digit comps year upon year. It was kind of 0:17:11.160 --> 0:17:14.159 amazing to see for a while. So Dominoes took a 0:17:14.280 --> 0:17:19.560 risk of potentially alienating or antagonizing some of its franchisees 0:17:20.000 --> 0:17:22.920 by insisting that they all get on this unified point 0:17:22.920 --> 0:17:25.960 of sale platform. When did they do this, When was 0:17:26.000 --> 0:17:30.280 that decision made? And how strategic? Like, you know, obviously 0:17:30.320 --> 0:17:34.080 at the time years ago, they may not have anticipated, uh, 0:17:34.119 --> 0:17:36.879 the existence of an Amazon Echo or ordering on an 0:17:36.920 --> 0:17:40.320 Amazon to Echo, But what what was their strategic thinking 0:17:40.600 --> 0:17:43.159 at the time in terms of what that will what 0:17:43.240 --> 0:17:46.240 that would enable them to do? Well? I think they 0:17:46.280 --> 0:17:49.440 saw the like when they did this, everybody sort of 0:17:49.520 --> 0:17:51.800 knew that the Internet was gonna we were all going 0:17:51.840 --> 0:17:53.879 to be ordering on the Internet. Now, we didn't see 0:17:53.960 --> 0:17:57.399 the idea of of the echo or or anything like that, 0:17:57.480 --> 0:17:59.760 we're ordering on TV or ordering on your car, but 0:17:59.760 --> 0:18:01.760 people had a pretty good idea that we were going 0:18:01.800 --> 0:18:04.000 to be doing a lot more ordering on the internet, 0:18:04.480 --> 0:18:07.720 and that's sort of where they wanted to go, and 0:18:07.920 --> 0:18:12.400 you know, they you know, wanted to to control that process. 0:18:12.440 --> 0:18:14.639 But it was definitely a really big risk and it 0:18:14.640 --> 0:18:17.680 did anger a lot of franchisees at it. It went 0:18:17.800 --> 0:18:20.200 was Dominoes founded, and then when did they sort of 0:18:20.240 --> 0:18:24.240 make this leap? You know, that was I'm not sure 0:18:24.440 --> 0:18:26.600 that the exact year of when they did it, but 0:18:26.720 --> 0:18:30.040 goes back many years and it dates back before there 0:18:30.720 --> 0:18:34.360 before their IPL So this is now many year process 0:18:34.440 --> 0:18:37.960 that it took franchise ease to do. Interesting do you sorry, 0:18:38.000 --> 0:18:39.960 I don't know if you were covering the food industry 0:18:39.960 --> 0:18:41.600 around the time of the I p O, But do 0:18:41.680 --> 0:18:46.040 you remember what the like, what the business narrative or 0:18:46.080 --> 0:18:49.679 the investment story actually was around that time? What was 0:18:49.760 --> 0:18:54.160 Domino's telling investors was the growth story back in two 0:18:54.160 --> 0:18:57.159 thousand four? Well, I mean at the time it was 0:18:57.240 --> 0:19:00.720 sort of you know, between two thousand four and roughly 0:19:00.880 --> 0:19:05.680 two thousand and eight. They were sort of this you know, 0:19:05.720 --> 0:19:10.120 I mean they were just this well established franchise model. Um. 0:19:10.160 --> 0:19:13.520 I think they're most of their growth was in international markets, 0:19:13.640 --> 0:19:17.040 not in the United States. It was largely considered you know, 0:19:17.160 --> 0:19:20.159 an established legacy brand by the time they went public 0:19:20.200 --> 0:19:23.720 in two thousand four, so it's it's not your classic 0:19:24.119 --> 0:19:26.240 I mean, they've been around for decades by the time 0:19:26.240 --> 0:19:30.119 they went public, you know, so they were probably something 0:19:30.240 --> 0:19:33.919 more akin to a Wendy's for instance, where you know, 0:19:34.240 --> 0:19:39.160 Wendy's has a well established international market, but that's where 0:19:39.160 --> 0:19:40.920 it's growth is going to be in the future years, 0:19:40.960 --> 0:19:43.480 but it's in the United States. It's you know, it's 0:19:43.520 --> 0:19:47.560 it's growth is basically was basically behind them. Nobody and 0:19:47.640 --> 0:19:50.560 I would argue Dominoes, nobody saw what what was coming, 0:19:52.320 --> 0:19:55.280 So that that raised an interesting question. So, okay, they 0:19:55.760 --> 0:19:59.280 had made the strategic decision prior to having gone public 0:19:59.720 --> 0:20:01.639 they were going to sort of really build in the 0:20:01.680 --> 0:20:04.640 potential for the use of tech. But at the time 0:20:04.680 --> 0:20:07.480 they went public still they were not being thought of 0:20:07.520 --> 0:20:10.080 really like that. They were just like, you know, sort 0:20:10.080 --> 0:20:13.920 of mature company like a Wendy where it's like, okay, 0:20:13.920 --> 0:20:16.159 it's a business. It makes money, but it's mature and 0:20:16.200 --> 0:20:18.000 it's kind of boring. And so this sort of gets 0:20:18.040 --> 0:20:20.840 us to the crux of what we were talking about earlier, 0:20:20.880 --> 0:20:24.159 which is that yet, despite this perception of them being boring, 0:20:24.720 --> 0:20:27.200 the stock is up about twenty eight fold since the 0:20:27.320 --> 0:20:30.520 type po and really it's almost like matched Google since then, 0:20:31.080 --> 0:20:34.480 tick for tick. When did perceptions of the company start 0:20:34.560 --> 0:20:37.679 to change? When did people start to realize like, Okay, 0:20:37.680 --> 0:20:42.800 there's like they're really executing extremely well, they're growing really well, 0:20:43.000 --> 0:20:46.119 They're just this is an exciting company and not just 0:20:46.240 --> 0:20:50.520 an old line food Jim. Yeah, the big turning point 0:20:50.560 --> 0:20:53.760 for them from a public perception standpoint was when they 0:20:53.800 --> 0:20:57.440 advertised that their old pizza was carible. All right, I 0:20:57.520 --> 0:21:00.320 remember that, Yeah, that is this is one of the 0:21:00.359 --> 0:21:03.640 few restaurant companies where we could really say that there 0:21:03.760 --> 0:21:07.800 was this absolute moment when everything sort of turned for them, 0:21:07.840 --> 0:21:11.200 for them in the public, in the public's eye. And 0:21:11.320 --> 0:21:13.600 you know, that was around the two thousand, two thousand 0:21:13.640 --> 0:21:16.520 and eight, two thousand nine time frame. Going into that 0:21:17.200 --> 0:21:20.439 um and I remember writing at one point wondering whether 0:21:20.640 --> 0:21:23.200 people were getting tired of pizza because all the pizza 0:21:23.280 --> 0:21:28.240 chains were sort of struggling at and including Dominoes. In fact, Domino's, 0:21:28.680 --> 0:21:32.240 uh you know, Domino's had done a securitization around the time, 0:21:32.760 --> 0:21:35.320 and uh you know, so they were heavily in debt 0:21:35.400 --> 0:21:38.639 around at the time of the Layman Brothers collapse, and 0:21:38.680 --> 0:21:41.040 so you know, they were one of those companies that 0:21:41.119 --> 0:21:45.600 you actively wondered would survive over during the recession. But 0:21:45.720 --> 0:21:49.960 what they did was they decided to reformulate their pizza recipe. 0:21:50.520 --> 0:21:56.920 They then advertised that their old pizza was junk then 0:21:57.040 --> 0:22:01.320 and actually had comments from customers on their advertisements that 0:22:01.359 --> 0:22:04.480 their whole pizza was terrible. And then they told people 0:22:04.560 --> 0:22:07.400 that we've got we've got this new recipe, you should 0:22:07.440 --> 0:22:10.280 come and try it to them. That is sort of 0:22:10.320 --> 0:22:15.640 the base of their comeback. That fixing the food and 0:22:15.720 --> 0:22:19.040 making it better and more palatable to the customer base 0:22:19.840 --> 0:22:23.960 was the first step towards towards their actual comeback. So 0:22:24.000 --> 0:22:25.760 that that was sort of the turning point in the 0:22:25.760 --> 0:22:31.480 public's perception. When did they start doing the delivery insurance 0:22:31.560 --> 0:22:34.360 or pizza insurance, Well, I think that was they did 0:22:34.400 --> 0:22:39.600 that last year. Wait, what is that I did pizza? Well, 0:22:39.640 --> 0:22:44.560 they started, they started they offered started offering last year 0:22:45.400 --> 0:22:50.320 where if they if something happens with your delivery delivery order, um, 0:22:50.560 --> 0:22:54.040 you could get you know, something for you could get 0:22:54.040 --> 0:22:57.320 it for free. Um. And then they extended it to 0:22:57.359 --> 0:23:00.159 carry out because that's where they see their growth in 0:23:00.160 --> 0:23:02.680 the future years is with carry out orders. But it's 0:23:02.760 --> 0:23:05.440 a lot of that is just to sort of establish 0:23:05.560 --> 0:23:09.480 their their delivery bona fides against their party delivery. So 0:23:10.080 --> 0:23:12.320 they had that marketing campaign and I remember that now 0:23:12.359 --> 0:23:14.600 that you mentioned it. To take our old pizza is bad, 0:23:14.640 --> 0:23:17.960 the new pizza is good? Is it a lot better? Like? 0:23:18.440 --> 0:23:21.120 I don't I ordered Dominos a couple of weeks ago, 0:23:21.160 --> 0:23:23.520 though it is pretty good, but I remember it being bad. 0:23:23.520 --> 0:23:25.560 But I don't remember. Was there like an agreed upon 0:23:25.720 --> 0:23:28.520 like what did they do differently? How did they actually 0:23:28.560 --> 0:23:30.399 make the pizza better from the old recipe in the 0:23:30.400 --> 0:23:33.800