In the volatile fast-food business, the tenure of a franchise operator sometimes lasts about as long as a meal at McDonald's. Domino's Pizza Inc., a national chain of 1,880 pizza restaurants, has an unusual policy designed to discourage transience among operators. The company, based in Ann Arbor, Mich., will sell a franchise to an employee only if he or she has been working at the company for at least a year and promises to stay for at least another year. Unlike most franchise operations, Domino's refuses to sell franchises to outside investors.
This restrictive franchising policy has helped Domino's -- which ranked #457 on the 1983 INC. 500 list of the fastest-growing private companies in American -- keep fast growth under control. Although the company is opening hundreds of new restaurants every year, it boasts a stable work force and has an annual failure rate among outlets of less than 1%. The policy has another benefit as well. Since Domino's knows its potential franchise operators before any sales are completed, the company can assure local banks that the employees are reliable. That often results in more favorable treatment on loan applications.
"Roughly 95% of the top executives here started as drivers and store managers," says senior vice-president Bob Cotman. "There's lot of opportunity for upward mobility." He should know: His first job for Domino's -- in 1966 -- was delivering pizza.