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1 Domino’s Pizza In the past two years, Domino’s Pizza has pulled off quite the comeback. The Ann Arbor, Mich.-based chain kicked off this turnaround after admitting it had a subpar product – a “crust that tasted like cardboard” – and launching an aggressive marketing and social media plan to complement its new recipe. These initiatives were huge risks that have paid off in droves. Before the “Oh Yes We Did”-themed changes came about, two years ago, Domino’s shares were worth about $7. They now average between $35 and $40. Following its wildly successful marketing and recipe shift, Domino’s same-store sales were up 3.5 percent for a two-year comp of 13.4 percent. The chain made $3.4 billion in 2011, closing the year with 4,513 franchised stores in the U.S. and 394 companyowned stores. Internationally, the brand boasts 4,835 franchised stores. Domino’s has also cornered the delivery niche. More than 22 percent of all pizza deliveries in the U.S. come from Domino’s, while 28 percent come from Pizza Hut and Papa John’s combined, according to The NPD Group. The company certainly hasn’t rested on its laurels, recently launching a new Artisan Pizza line, stuffed cheesy bread, parmesan bread bites and new chicken products. That was just on the domestic side. Domino’s international performance has put the company among the top five publiclytraded restaurant companies in terms of store count. The international division has experienced 72 consecutive quarters of positive same-store sales growth spanning 18 years. Domino’s estimates the potential for more than 2,800 additional restaurants in its top 10 global markets, led by the United Kingdom, India, France, Mexico and Australia. But with Domino’s, it’s been about more than bottom lines and happy investors. The company’s technology platforms and marketing initiatives have positioned the chain as a progressive leader in the restaurant industry. leapfrogpos.com Brands – TOP 10 In 2011, Domino's social media followers — through Facebook and Twitter specifically — grew 400 percent over 2010. "(Technology) is truly a way for us to offer one-on-one marketing with our consumers," CEO J. Patrick Doyle said in a recent earnings call. The company also began mining information from its loyal followers, launching Think Oven – an online suggestion box – earlier this year. On the mobile side, Domino’s launched its iPhone/iPod touch app in the summer of 2011, and it generated more than $1 million in sales within the first three months. Its new Android app achieved more than 140,000 downloads in the first two weeks and was the top downloaded app in the “lifestyle category.” Doyle pointed to the company's successful digital initiatives, including its Cyber Monday promotion which yielded more than 1 million orders in a week, and its inaugural Domino's Global Day, which resulted in a record day in online sales, as a big driver in its positive year. The company estimates that it did more than $1.8 billion in online sales globally in 2011. This averages $34 million a week just online. Other cutting-edge initiatives include its Pizza Hero app for iPads, an interactive pizza-making game that links to Domino’s career page, and an augmented reality application in the UK that allows customers to download deals through enabled posters throughout the streets of London. "We've reached a new level of customer loyalty in the United States and strong brand equity around the world. These results came from international momentum, but also from technology," Doyle said. "We are not the same company we were even two years ago. We really are a different Domino's." 4
leapfrogpos.com Papa John’s Papa John’s has perhaps the most recognizable spokesperson in the restaurant industry in founder/chairman/ CEO John Schnatter, who has successfully touted the “Better Ingredients. Better Pizza.” tagline as a huge point of differentiation in the intense pizza wars. Schnatter doesn’t shy away from expressing pride in his company’s avoidance of deep discounting. "Our brand remains resilient even in the face of what continues to be a challenging competitive and cost environment," Schnatter said in a recent earnings call. "We believe this commitment continues to resonate with the consumer. Quality always pays off in the long run, and it's gratifying to see consumers recognize better ingredients does mean a better product.” The chain has leveraged this positioning by launching products such as the five sausage pizza, with a new Chorizo sausage topping, as well as real pork sausage, mild and spicy sausage, and buffalo chicken pizza. Louisville, KY–based Papa John’s has also taken advantage of its partnership with the NFL to boost its visibility with new and existing customers, particularly through its extensively promoted Coin Toss Papa Murphy’s The concept of take-and-bake pizza began with Papa Murphy's in 1981. And as time-crunched families increasingly seek convenient meal opportunities, the positioning of take-and-bake pizza seems stronger than ever. Perhaps that explains why the chain’s sales were up a staggering 10 percent in 2011. Its total U.S. systemwide sales grew to $702 million last year, while same-store sales were up more than 5 percent. "Families are busier than ever before, and they look forward to coming together at the end of the day around a fresh baked Papa Murphy's pizza to relax and reconnect with each other. We have an amazing brand and product and so much opportunity for growth in 2012," said Ken Calwell, CEO, in an internal email to employees and franchisees. Calwell, a former Wendy’s executive, was tapped to lead Papa Murphy’s in November 2011. Papa Murphy’s is now the fifth-largest pizza company in the U.S. with more than 1,200 stores in 37 states. The Vancouver, Wash.-based chain is still experiencing a growth spurt, having recently signed Super Bowl promotion. The campaign sparked a lift in online ordering and enrollment in Papa Rewards. Papa John’s online and mobile presence is also strong – its iPhone app was launched in December 2010 and its Android app a year later. Lance Tucker, CFO, estimates that online orders for the company overall are north of 30 percent and that number continues to grow. Where the company is particularly making progress compared to its main competitors, however, is in unit count. After achieving its highest net openings in a decade, Papa John's system now includes more than 3,880 restaurants operating in all 50 states and 33 countries. This number includes 130 net new openings in the fourth quarter worldwide, and 237 net new units for 2011. The development pipeline as of the end of 2011 included approximately 1,550 restaurants (350 units in North America and 1,200 units internationally), the majority of which are scheduled to open throughout the next six years. Overseas, the company is planting flags in markets from Russia to the Bahamas. development agreements in markets such as Kansas City, Mo., Indianapolis, Phoenix and Canada. Franchising agreements signed last year equate to more than 265 future stores and 30 new franchise entity groups. Additionally, Papa Murphy’s has consistently embraced a diverse menu – offering everything from stuffed crust pizzas to deLite offerings and Mini Murph’s for the kids. The chain doesn’t shy away from innovation; for example, the Bacon Cheeseburger Pizza was launched in February and is topped with “burger sauce,” a blend of ketchup and mustard, as well as mozzarella cheese, ground beef, bacon, onions, Roma tomatoes, dill pickle chips and cheddar. For the second consecutive year, Papa Murphy’s was the "No. 1 Rated Pizza Chain" on Zagat's annual Fast Food Survey. The chain also earned the Franchisee Satisfaction Award in 2009-2010 from Franchise Business Review, and was listed as a Top 100 Food & Beverage Company from 2007-2009 by Inc. magazine. 5
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