Stock Exchanges - Domino's

VS

Hi, I'm Victoria Stevens, and welcome to this podcast. Stock exchanges. In my day job, working as a fund manager at Liontrust, investing on behalf of our clients in the UK, stock market listed companies. I'm fortunate enough to cross paths with some of Britain's most inspiring entrepreneurs. It's a huge privilege to sit across the table from the people who've put their heart and soul into growing and running companies.

And in this series, I want to share that privilege with you, our listeners. Now, many listeners are likely to have ordered a pizza from Domino's from time to time, but might be less familiar with how the global Domino's franchising empire works. Domino's opened its first store in the United States in 1960, and it's now the largest pizza delivery operator in the world.

The American Domino's Pizza Inc. is listed in New York and is the master franchisor for different territories around the world. Today, I'm joined by Andrew Rennie, the Chief Executive of Domino's Pizza Group, the London listed company which holds the master franchise agreement for the UK and Ireland and has over 1300 mostly franchised stores under its banner. Andrew is a two Domino's veteran, having started out as a franchisee himself in Australia, growing his mini empire to include 13 franchise stores within ten years.

He then joined the Sydney listed corporate entity Domino's Pizza Enterprises. Spending over two decades with the group, during which time its market capitalization grew from $132 million AUD to almost $6 billion AUD. Now, Andrew retired in 2020 to his farm in Australia, but as a self-confessed work addict, the life of leisure didn't last for long and he was persuaded to return to the Domino's empire as CEO of the UK plc last year, a move that was met with enthusiasm by investors given his experience.

Andrew, it'great to have you on the podcast today and thank you so much for joining me.

AR

Thanks Victoria and appreciate you having me. Thanks very much.

VS

Why don't we start at the beginning? So you grew up in a small town in New South Wales in Australia. So can you tell us briefly about your formative years and how you initially came to take on a Domino's store?

AR

Yeah,so you're right. I was born in a place called Wagga Wagga, which most people find very funny. It's in the bush. My father was actually a Scottish immigrant. He moved to Australia when his 15, and as a shearer. So I grew up in a family where you only get paid for the amount of sheep that you shear. So very much a work ethic, which still exist today with my father. So at the age of 15, I left school and joined the military and became an avionics technician. And during that time I put a lot of the entrepreneurial skills, together that my father taught me. My brother and I had started our own business when we were 12, growing pigs for the local farmers, for Christmas and Easter, etc..

Then whilst I was in the military, I was building apartments, I was shearing sheep on weekends and I was playing semi-professional rugby and getting paid, which was funding property building, etc.. So by the time I was 25, I had this real yearning to, to be in business full time and looked around and realized that franchising was what I wanted to be into.

VS

Perfect. And in terms of taking on that first store and then growing that empire, if I may call it that, to 13 stores. What do you think it was that made that so successful? You talked about your work ethic. I've read that for you customer service was absolutely paramount. So talk us through a little bit of that.

AR

Yeah, I think the key here is a couple of things: the military taught me a lot about systems and processes and discipline. So that was really important. And I applied those principles with my team. And equally, that the work ethic of my father and my mother played an important part. So I worked extremely hard.

I read a book about great customer service, how it was a differentiator in so many businesses just before I took on the business. And one of the reasons why I had no choice but had to give amazing service was because the average Domino's store back then, which was actually called Silvio's, but bought the Domino's brand and converted to Domino's a few years later.

We only had about 55 shops. Pizza Hut had 427. We were tiny and the only a territory available to me was a small town called Palmerston, which was near Darwin in the north of Australia. Now the address count for that town only had 3000 addresses. So in population terms it was about 7000 people. The average Silvio's slash Domino's store at that time had 60,000.So I was one tenth of the size of the population base. So I couldn't afford to lose one customer. So we use that military expertise, focus on customer service. And literally any customer that was given bad service or a bad product, which happens because the 80% of our business happens in 20% of the time. It's very chaotic. Things can go wrong when you're making fresh product every single night. I would make sure when apologize myself, you know, do whatever I can to make sure I didn't lose those customers. And that became our mantra. And we took that store from the bottom of the sales, it was only doing 5000 a week in 1994. And by late 1995, it was doing over 20,000 a week. It was the number one store in the country. So literally off customer service on one tenth of the size of the other stores that we were. Yeah, we did pretty well.

VS
Yeah, absolutely. I'm going to digress for a moment there into that entrepreneurialism, I suppose, of the franchisees, because I think, you know, one of the issues historically for Domino's in the UK has been a level of tension between the corporate and the franchisees.

So I wanted to ask how you think that it's helped that relationship with those franchisees. Them knowing that you've been through it as well, you've been through those challenges, but also the opportunity and you actually understand what they're going through.

AR

Yeah, look, it's helped me a lot. I mean, we'll talk about it later in the European experience ahead. But certainly being able to speak the same language as the franchisees. I've known a lot of the franchisees over 20 years in the UK because we used to always catch up together, globally, share ideas. And I have nothing but respect for what they've done. They, they put their whole family's houses, life savings, and all of them started with one pizza store like myself.

They started and most of them started as pizza delivery drivers, and built empires and even far bigger empires than I built. And we've probably got some of the best Domino's franchises globally, which says a lot about when you've got 21,000 stores globally. Right. That some of the best. I would say some of the top ten best franchisees are here in this country.

So we're very fortunate. And I know people see that the negative of having them too big. But the positive is they're such great operators. They have amazingly strong balance sheets so we can weather tough times like Covid etc. and they did. And their P&Ls are in really good place, which is why I'm confident about the growth.

VS

Absolutely is one thing that we really like about franchising businesses when we invest in them is that you almost get two bites of the cherry, if you like, in terms of entrepreneurialism, it is because you get the company itself and then you get all those different layers of entrepreneurialism coming through underneath from the franchisees.

And for them, of course, you know, that's their livelihoods.

AR

That is spot on. And I think the reason that there might have been a breakdown, is that the lack of understanding and appreciation for what they go through and the investment they put into their businesses, and it's their livelihoods. And the one thing I think that differentiates these franchisees from most others around the world is that they don't think about buying and selling, that they are generational.

They've held these stores for some of them getting close to 40 years. We're 40 years old next year in the UK, and they’re second generation, their children, who are now 25 and 35, are coming through wanting to run the business and all I think about the growth for the next 20, 30 years for those second generation.

So that's a completely different mindset compared to a lot of other businesses where they're just there for five years to sell it and make a profit. These guys, a majority of them don't think like that.

VS

Yeah, absolutely. So maybe we move on to the next step of your journey. And I appreciate, you know, it's difficult to sum up two decades of hard graft in a reasonably snappy answer here.

But if you can tell us a little bit about how that opportunity came to pass, because in a sense, you stopped empire building because, as I understand it, you were invited to join the corporate entity listed in Australia.

AR

Yes. After about ten years of being a franchisee, I was approached by Don, who was, running the business, to do exactly what he and another gentleman Graham had done to basically trade their stores for stock, which was a private company at that stage. So I liked the idea of it because, you know, effectively just opening another store to me was becoming sort of same, same. And I loved the idea of being part of the bigger mothership and growing the bigger business. And, so therefore they gave me the opportunity, I came on board, folded my stores in, which gave me a percentage of the business, and became the fourth shareholder in the business while we were private. I headed up corporate stores, and we had about 100 corporate stores across Australia, New Zealand. And that was providing about half the profits of the of the business, which was just basically an Australian small New Zealand business of that size. So we're talking 2003, 2004, and then we went public in 2005.

VS

Right. Understood. And then tell us very briefly about how that developed. Because you moved around a bit, didn't you? You moved to Paris.

AR

Yes.

VS

You ran, the French and Belgian businesses then came back to Sydney to run the Australian, New Zealand business and then went back over to Europe. So yeah. Tell us a little bit about that journey.

AR

Yeah. So, what happened was that, after we'd been listed for literally only a year, we discovered that this whole thing about being listed in public companies is all about the growth. And people considered that we were going to be ex-growth within the next five years, and at that stage we thought Australia would get to 600, 625 stores. Today it's over 740, by the way. So therefore we were looking to buy another brand and the parent company came to us, Dona and Graham, and said, look, you guys are really good operators. You know, some of our best in the world. We have an opportunity in Europe. We'd love for you to go there. And we know you're Australians, but we think your model of high volume mentality would work there. And the businesses had been in administration, the US had taken them out of administration.

So we bought the rights to, France, Belgium, the Netherlands. There was existing business there, 155 stores. And I looked around the room and said, who wants to go? And they said, does anyone speak French? I said, I can, I can count to ten. They said okay, that's enough, you can go. So, I ran the French Belgium business and a good friend of mine, Andrew ran the Dutch business, and we headed over there in 2006. And, and we took on the business, which at that stage it was effectively, you know, loaded up with royalty losses, royalties etcetera, and was losing probably $3million AUD or $4million AUD a year in losses. And, yeah, our job was to turn it around and we did. All we did was I came in with our, I think, entrepreneurial approach, and still franchisee mentality.

The French guys weren't easy because they'd been through some tough times. But we had a couple of corporate stores and led by example. And effectively the average sales was only €10,000 a week in 2006, and the two corporate stores were doing like €6,000 or €8,000.

And one of the stores I grabbed, and we did €10,000 in 1 day. And just franchisees eyes bulge with, how the hell did you do that? And I started to get their respect and I was working very hard, which is which gained their respect as well. And literally over the next four and a half years, we doubled the store count and tripled the sales.

And the business was then making money. And then, having a third child. So we decided we wanted to move back to Australia.

VS

Understood. And we might come back when we talk about the UK business in terms of that mentality of improving store economics and how that can provide multiple levers for growth.

So obviously you were extremely successful during your time at DPE, and as I said in my introduction, made that decision to retire 4 or 5 years ago now. So what catalysed the decision to retire in the first place?

AR

Yeah. So by that stage, I'd been in the business a long time. As I said, almost 20 years in the parent company and ten years before that. So it was, not 30s. It was 27 years or something. So as a long time, my family had been out of the country literally for a dozen years. So we, as you said, we'd gone back to Australia for three years, ran the Australian business, and then the chairman asked me to go back to Europe, again in 2013, which I did, helped turn the business around. We took on the German business and bought it off DPG, and took that from literally 20 stores losing a lot of money to 400 stores making a lot of money.

One of my one proud, proud moments is sort of building the business plan for Germany and seeing it all execute as it should have, you know, pretty well, spot on. And also, you know, taking the French business, turning it around. So I'd been working very hard and traveling every week. I was actually living in the UK. My children were going to school here. My eldest son was actually working in one of the biggest franchisee stores here , So I knew this business very well. I mean, not only did I know Domino's, but I knew the UK business and loved it and always admired it, had a cult like following in the UK.

Anyway, my family, you know, it was time to get back to Australia and I decided that after 27 years I needed to have a rest. And I'd started to deploy my ow, wealth into other assets: farms, cheesecake shops. You know, various things.

VS

Also franchise businesses.

AR

Yes also franchised businesses. Also a car wash business. So I loved building businesses and helping turn them around and grow them. So I wanted, wanted to have that more time to do that. And it was also my successor was in place, you know, I left at a good time and Andre was able to step up. So, and it was fortuitously, just before Covid broke out. So very lucky.

VS
So calling it retirement really isn't fair at all, is it? It wasn't the life of leisure.

AR

My version of retirement is probably different to most. I was working just as hard. I mean, I unfortunately, due to my father, I still wake up at 5 or 6 a.m. every day, typically trying the gym and start work so that that didn't change.

VS
And you just touched upon an interesting point that we've heard echoed from other entrepreneurs many times, which is, you know, the toll on those around you that it takes to almost be behind that ambition. You know, obviously people look at very successful entrepreneurs and they think, you know, wow, that's incredible. They've clearly put in a load of hard graft.

But in terms of the support network, that's needed behind that, the families that move all around the globe, you know, that's that can be really tough can’t it?

AR

Yeah it was. Look, it definitely took a toll on my first marriage. My children were very respectful and travelled. Fortunately they've, you know, they’ve gained different languages. One of them is working in the Middle East now. One of them is back in Australia and one is here in London, which is why I'm here. He's the youngest. He's 14. So, yeah. Look it is tough. Yeah. But there's also upside as well, I think. I think that creates resilience and grit in your children. So I also think there's a benefit to that.

VS

Absolutely. So you've, you've kind of hinted at it there in terms of what lured you back into Domino's. But, I'd like to know, you know, how did you make that decision to swing the bat again within the Domino's empire?

AR

Yeah. So I had a board member reach out to me, back in it must have been 22 after they lost Dominic. Because they had tried to approach me a few times in the previous sort of ten years, and it didn't suit because I was a DPE. I was very loyal. Was there anything we could do to get you off the bench, and I said, well, you might be in luck because, my ex wants to move back to London with our son, which I'm supportive of. I'm not the sort of guy to sit around and do nothing, and I want to be near him. So literally we just had to wait to see that was confirmed and it was, and they happily in school here now and living here. So that brought me back. So I thought, okay, well, I'll have one more go and this will be it, until he graduate from high school.

VS
Absolutely. So you've previously said, I think, that Domino's, the brand, is in your blood. And I personally was amazed when I first joined the team and we were already existing holders of Domino's. This is ten years ago now. About just how much, how big the share of the overall UK takeaway market is controlled by Domino's. So today, as I understand it, that's over 7%. And that's not just talking about pizza, that's talking about every takeaway that consumers in the UK order. I think that's an amazing stat, really. And one thing when we spoke before, Andrew, I think that came through from our visit to your distribution centre, is that, and I bet most people won't guess this. But what do you think the most popular day of the year is for Domino's?

It's Boxing Day, and I thought that was just amazing because I thought, oh, what are all these people doing with their leftover turkey? Surely that should be New Year's Day or something?

But it's an important point. And you've raised it before in terms of coping with what are quite considerable peaks and troughs in demand, in terms of the challenge of that presents to the franchisees in terms of keeping up that customer service.

AR

Yeah. Look, I think, I think the, the testament to the quality of this brand goes right back to the founder, Tom Monahan. He had a real a family mentality. He was really focused on the customer. And I've just perpetuated those if you like, you know, never lose a customer, really focus on saving seconds like we were. We are called, Dominoids around the world.

So, you know, there's over 150,000 Dominoids and most of them been in the brand 20, 30, 40 years like myself. You know, you look at the the franchisees we have here in the UK, I think the youngest one has probably been around 20 years. So that it really is in your blood. It's a, it's a brand that helps each other.

We have a foundation called Partners Foundation, where team members, franchisees donate to a fund, where 100% of it goes to, Domino's team members in need. When they're having tough times and we help them out in need, etc.. So we don't talk about those things too much. We also sponsor the Teenage Cancer Trust.

But it's a very giving organization. Tom Monahan himself was actually raised in a Catholic orphanage. His father passed away when he was young. His mother couldn't afford to raise he and his brother. So he very stout Catholic and he gave 90% of his wealth away to the Catholic Church, effective when he sold the business. And I think those values really play through Domino’s globally.

So, yeah, we have incredible team members. We've got, over 35,000 staff in the UK, employees, you know, our drivers, our riders. And I think 90% of our franchisees started as pizza delivery drivers or riders. So the rags to riches, you know, story is very true inside Domino's. Which I think is key to its success because they're people who started at the ground and worked their way up.

VS

I mean, that that came through, I think, in spades when I looked at your last annual report and there was a Q&A that you had done within that annual report where I think you talked about there being a real ethos of opportunity and growth, within the whole company, and that your story, and we see that it's very visible because you're at the helm, actually isn't that unusual in terms of people going, as you say, right, from making the pizzas, and then during over the course of many, many years, actually, there's plenty of opportunity for progression within that corporate entity.

AR

I totally agree and a lot of these guys and girls didn't go to university, you know, didn't come from high economic families. But they've grafted along the way and it's a business that if you work hard enough, you'll be rewarded in, and the thing that I probably have focused on most in the last year is focusing on our customers, going back to my original store and really, you know, we talk about customers for life.

So what can we do to make sure that we don't lose a customer? Which is easy to do in this business when you're delivering millions of pizzas every day that are made fresh on the spot for you nd delivered to you. At the moment, we're averaging 23 or 24 minute average delivery times from the moment you press the button to order to when we’re at your house.

They're pretty incredible times across the size of the business that we have, and we're very proud of those. So we're focused on the customer because we again, like that little store I had at the start. We've got such large market share, we need to make sure we look after every customer.

So the average customer only orders delivery literally once a quarter. We think we can maybe get one more order out of them per year. Which is why, you know, our big focus is on loyalty, etc. at the moment.

VS

Yeah, absolutely. I think that's quite a nice segue, actually, into your plans for future expansion of Domino's in the UK, because I would say, and you correct me if I'm wrong here, but I think you can summarize the different levers of growth really as being, you know, quite simple actually. More stores, more customers, higher order frequency, as you've said, and higher value per order. And actually in terms of how you look at the balance of those, where do you feel that the strongest lever that you can pull is?

AR

Yeah, it's an interesting question, and probably hard to say. You wouldn't want to bank on any one particular one because I think that's too risky.

I think they all play a part, I think value is a key message, right? At the end of the day, all of us are consumers and we all want good value, and value just isn't price. It's like if I got a pizza delivered, let's say cost £12, but it took an hour and it was cold. That's not good value.

I could pay £13 or £14 and it was delivered in 20 minutes, was hot, was fresh. Someone served me who was really nice. The pizza tasted great. That's great value. So value isn't just represented by price alone. And I think that's part of what we focus on is the whole value equation.

So loyalty we're going to start, we've already started testing it. We've got some great data there. We'll start to roll that more towards the back end of next year. But in the meantime our service times are way better than they have been. We're really focused on the customers. We're really consistent with our marketing. You know, we've got 8/10/12 out there at the moment. We've got £4 lunches. So we're doing all these things. And also we're offering more choice from a health perspective as well, so that we have our cheeky little pizzas under 450 calories. We've got some more things we're looking at having on the menu. You just have people who want to have sort of a lower calorie option. It's there.

We're never going to be a health food. That's not what we're going to try and be. But we can be better for you. And there's moments where you might be, your mum want that 150 calorie item. And the teenage boys want the fully loaded pepperoni passion, which is, you know, what we all went through. So we want to cater for most people.

VS

Yeah. What's your own personal pizza of choice?

AR

I like a pepperoni passion on a thin and crispy with pineapple and jalapenos.

VS

Wow. Nice. And I'm guessing you have to do quite a lot of exercise to stay in shape eating that. Yeah, luckily I'm a bit of an addictive person when it comes to sports, so I train pretty well every day.

VS

Right? Yeah. And then in terms of that data angle, I think that's really interesting for Domino's as an opportunity. And you've talked about how you could do a lot more with that looking forward. So digital disruption has clearly impacted the takeaway food market as well as other industries. You know, you've had the rapid rise in popularity of the online delivery aggregator platform. So just eat Deliveroo, Uber Eats, which Domino's has embraced. But also there's that increasing opportunity to utilize that first party data that customers are giving to you willingly when they're ordering to be able to hone a marketing strategy and become more efficient and effective that way. Is that something that you see as being critical to future success?

AR

Huge, huge, and to be honest we’ve only really started tapping into those insights in the last sort of 6 to 9 months. We had an IT system that wasn't really up to providing the correct data or accurate data. Thankfully, now, before my time, they started rebuilding their system and it's basically complete. So the data analytics team we have is quite incredible. And the insights we're starting to get on the on our consumers and how we can better serve them, and know about them more accurately, because we have so much data and 90% of our orders are online. Right? So we have their data. Obviously we have to use in a very sensible way, which we do. But yeah, the insights we're getting now are very rich, and that's going to help us make the right decisions for the future, etc. So I'm equally excited about that.

We know a lot about the, average UK consumer. We’re in every second household - 13 million households order from us every year. So one out of two households orders from Domino's every year.

VS

There's an incredible stat when you think about it.

AR

It is, it really truly is, which is one of the reasons that it might be getting to a segue way too early for you. But one of the reasons why I called out that I think we have not only the need and desire for a second brand, but we have the infrastructure for a second brand.

You know, not only do we have an incredible supply chain network, which is, as you've seen first hand, and we're actually adding more automation to that, make it more efficient. But we have this 35,000 team members and fully trained employees. We have these incredible entrepreneurial franchisees that have great head offices themselves. We have an incredible head office team ourselves and the data analytics team. So we have all this data and knowledge and people - let's synergize that so we can grab another brand that's already sort of maybe started and spent that startup capital, but has still a long runway of growth that will help tick up the growth multiple that we don't have today because people see us as ex-growth even though we aren't.

I can see while some people see our market penetration think, well, there's not a lot left, we think there is, but it's probably harder to get to, to be fair than if we're only a 200 store business. So, that's why we're looking at that.

VS

Absolutely. And is, do you feel, that a decision or a direction of travel that has been generally well-received by UK investors?

AR
Not by everyone.

And, you know, you can see our share price at The moment is depressed. I think it's quite good value, which was great because we've been able to buy back during that period, but that's okay. I mean, everyone when they buy into a stock and it was only one brand. And then the new CEO comes and says we want to do another brand. And there's the risk attached to that. And I completely get that. So I get that.

So we are seeing some shareholders get out. But the good thing is that we're seeing some amazing shareholders come in that get that picture, get that story. And we have long term holders like Liontrust who we're really appreciative of that that get the long term benefits of all we're doing. And if you think about the ride that you guys have had for the last ten years, there has been a lot of shareholder money invested into commissaries, and invested into IT. If you can stay in for the ride for this other brand, you get to see all those investments synergize and extracted value out of them for the first time or for the second time if you like.

So that excites me.

And the way I think about it is I want to set up a business so that when I'm not here, it's still got another 20/30 years of growth. So all that second generation and all the young people in the head office, have a long term vision to stay with this business. They don't have to leave for growth.

VS

I think it's refreshing to hear you say that, because I think something that's reasonably frequently thrown at UK investors is that they are somehow anti-growth, anti-ambition, and I sometimes think that's a bit of a misnomer because of course there are investors out there who are more conservative in their approach. They have mandates which will push them towards being so. But I don't think that the UK investment market is anti-growth at all. They appreciate a measured approach to it. They appreciate discipline in terms of demonstrating, you know, a clear focus on ROI. But when I hear you talk about that, about investments that have been made in the past that are still being made and the ability to leverage that for the next five, ten years. Well, as an investor with a long time horizon, I find that exciting.

AR

No, I totally agree with you. And I think for us, we've got this, great golden goose that produces a lot of free cash flow that we've been able to use to do buybacks, consistent dividend, investments. And we think that we can continue to grow that cash flow that will help us go into something else.

It will actually help grow the top line as well, which will then double down again. So you're going to have a lovely dividend secure stock with a great base that's also going to have strong growth potential. So to me that's the best of both worlds. And I think the keyword you said before Victoria was discipline.

You know we are very disciplined approach. I know the history about this and this business going international and getting it wrong and using up a lot of and wasting a lot of shareholder money. I'm very cognizant of that. You know, with my father being Scottish, I'm very much not into losing money. Yeah. I'm very focused on every, every penny.

And I treat it as my own business. You know, I do genuinely think about this as a long term upside. I'm fortunate. I've done very well for myself. So I don't need to make short term decisions to line my pockets. I don't have to do that so I can build the business in a nice, strong, long term sort of mindset.

VS

That's what we love to hear. And you mentioned buybacks there. I mean, clearly the market has been going through a period of significant volatility over the last couple of years. More and more companies are looking to share buybacks as an increasingly efficient avenue of capital allocation. Generally speaking, we're supportive of that. If the company feels that there is opportunity to do so and they have a strong balance sheet. Does it frustrate you sometimes, the short termism of the stock market? I mean, you've clearly spent time with Domino's DPE as a private business as well as a listed business. Is that a frustration sometimes, or do you see it as an opportunity?

AR

Oh, look, I see both. You can't have one without the other, right? If you want the rainbow, you got to have the rain as well, right? And it's a bit like that. So there's benefits to being listed and there’s downside to being listed. And same with being private. We are where we are. I can't change that. And I can only focus on the things that I can change. So for me, it's trying to articulate the story as clearly as possible.Yes. There's always a period where you're just trying to build the pieces behind the scenes. And I can assure you at the moment, maybe it looks like we're duck on water and the legs of paddling fast underneath. Everyone's working extremely hard to create this large growth business, whilst ensuring at the same time that we don't ruin this great, you know, strong cash flow business we have.

You know, I think one of the things I’m excited about is when I look at other businesses in the UK who, you know, have great growth, but they spend hundreds of millions of CapEx, you know, we're spending less than 20 million at this stage. And ok maybe we'll spend some more in the future, but it'll be on the basis of getting growth.

So we're very low CapEx. So our return on capital employed is quite impressive. So we don't have to spend too much capital to get the returns we're getting today. And return on capital is very important to me. So as it is to franchisees, I always look through the lens of a franchisee. Is this something that I would like to own and buy? So that's exciting

VS

And that's probably been embedded in you ever since you were a franchisee yourself?

AR

Yes.

VS

So before we finished, I wanted to ask you, if you don't mind how you think of the concept of entrepreneurialism itself, because I think some people see that definition of an entrepreneur as somebody who must necessarily have founded a business in the beginning and grown it right from those original roots. But I think it would be really difficult for people to look at your biography to disagree that being an entrepreneur absolutely can be somebody who's not a founder in the first place, but nevertheless plays a critical role in transforming a business, growing it, changing its prospects, and looking to the future to build from those initial from those initial beginnings.

AR

Yeah, it's a great question. I think, to me, entrepreneurialism is a mindset. You know, I quite often didn't think of myself as an entrepreneur. I just thought of myself as someone who loved being business and loved growing businesses. So I think an entrepreneur is someone who wants to grow something and probably has a higher level of risk appetite, but on the basis of calculated risk.

And I think that entrepreneurs are prepared to take the risk and have the courage to fail, which is not easy. And they quite often measure the downside risk of that failure. So I look at things and say, okay, what if the worst happens? Can I live with that? Is it going to bring the company down? If it is, we can do it right.

That just it's a first rule. But if we if we do it and we just skin our knee, you know, and it's not terminal, is it worth doing? Is the upside risk worth that small downside risk. So you're always calculating in your head. You know I think quite often it's about a risk calculation in an entrepreneur's head. And some entrepreneurs go too far and blow themselves up. You know, and I would say that it's reckless. But a lot of those people also came back from that and learned from that and became more successful. I don't see myself one of those. I've had small failures, but none of the failures being able to bring me down so I can learn pretty fast. And I'm also a big believer you don't learn from your own failures. Also learn from the failures of others. So I don't need to have to make the mistake to to learn from someone else's mistake. So yeah, I'm very, calculated in how I take risks, but I have very much a mindset of growing. I want to grow things for the right reasons and grow in the right way. Not just in not just in a fast way, but in a solid way for the long term. And, I think that's what we've successfully done around the globe. Yeah. And this is this is a great business and a lot of hard work has being done here for the 40 years before I or the 38 years before I arrived. You know, I just want to take that what they've done and promote that legacy into a better place and leave it in a better place than when I arrived. That's my my wish.

VS

Absolutely. So I've got a final question for you, Andrew, which is a bit of a curveball that you've clearly been very successful in your career, but I wonder what you'd say if I gave you the opportunity to exchange places with any other person, in any other career, just for a day. What would be interesting to you? Who would you exchange places with and why or why not?

AR

It's a very good question. I certainly wouldn't be a politician because I wouldn't make a good politician. All these incredible businesses around the world. It’s interesting, this is one that will catch you off guard.

I referenced this the other day – we have a monthly team meeting amongst all our team and head office and usually 400 people on the team's call. And I got asked a similar question about what businesses do I admire? There's a small business in Amsterdam. This young girl started at about the age of 25, in about 100ft². And she makes one cookie. It's a triple chocolate cookie. That's all she makes. That's all she sells. And this business turns over millions and millions of euros. She's just relocated to a bigger store. And the way that she's curated that business, the love and attention of rolling the cookies in front of you with her three, four, five, now about 15 staff, the way that she's kept true and disciplined to that product, it's incredible. All right.

So if I could work in that business for a day and just absorb all the things. And I said during the early days, I met her many years ago when she first started, I'm not a huge chocolate fan. Any chance you could do a Red velvet or, you know, a different flavor? She said, no, just only do triple chocolate.That's all I do. And I love that discipline. And she stuck to that. And, it's a beautiful little business.

So to me, I get inspiration from small entrepreneurs like that. That reminds me of what an entrepreneur is about and reminds me about, you know, our customers don't care how big our business is. They don't care that we sell over 100 million pizzas a year. That's irrelevant really. What they care about is that their pizza right now was delivered on time. Does it taste good? Was a served by someone who actually who cared about what they did and was it well priced? You know, did I feel like I got reasonable value? One of the misconceptions is that we're an expensive brand. And if you look at the menu price, you'd say, okay, it's expensive, but only 2% of our customers actually buy off the menu. It's actually bought off coupons and deals, etc. so we're trying to break that mentality down and we're succeeding.

Consumers are telling us with the best value since 2020 and things like £4 lunch and 8/10/12 Monday to Thursday are breaking that mentality and changing perception, which is what we want to do.

VS

Yeah, great products, great value, great customer service.

Sounds easy when you put it like that doesn’t it?

AR

It does! The actual Domino's algorithm is product, service and image divided by the price equals value. So we come back to that. That's the algorithm that's been around for like 30 years. Product, service and image divided by price equals value. And that's what we think about every single day.

VS

Brilliant. Thank you. And thank you so much for joining me. It's been such a pleasure chatting to you. And for our listeners, please do subscribe via Spotify, Apple, Google or your usual podcast provider. As always, please remember nothing in this podcast should be construed as investment advice or soliciting to purchase securities in any company or investment product mentioned.

See you next time.