Domino’s snaps up Danish territory

Sarah Stowe

Domino’s Pizza Enterprise is adding 150 stores to its European footprint with the acquisition of Domino’s Pizza Scandinavia.

The Australian business has entered into a binding agreement to acquire the master franchise rights for Domino’s Pizza in Denmark. It also acquires the Domino’s Pizza Scandinavia business assets.

This will increase the European stores from 2700 to 2850.

Domino’s Pizza Enterprises (DPE) will pay almost $4 million (€2.5 million ) for the business which ceased operations and entered administration in early March 2019.

Store acquisitions are conditional on the leases being re-assigned. DPE expects to complete the transaction progressively in April and May 2019.

Domino’s Denmark pizza potential

The Danish market sits well with DPE’s existing portfolio of Domino’s Pizza territories in Europe and represents an additional growth platform.

Denmark has a population of approximately 5.7m and there is a market potential of approximately 150 franchised and corporate stores for Domino’s Denmark.

The master franchise agreement with Domino’s Pizza, Inc is an initial 15 year term with a further option to renew for 10 years.

DPE expects to restart operations in Denmark with about 20 stores within the next year, led by current European senior executives who will relocate to Denmark.

DPE will be investing in store equipment, IT systems and other central support. However it predicts the impact on FY19 underlying earnings per share is not material. As a small territory initially, the Denmark business will take some time to contribute to earnings.