Domino’s has reached a new five-year framework with its franchise partners as part of a wider move to widen its store network in the UK and increase investment in its digital platform.

The pizza restaurant chain is aiming to hit new targets in excess of 1,600 stores delivering £2bn of systems sales by 2028, before 2,000 stores delivering £2.5bn of system sales by 2033.

Domino’s has stated that is currently trading in line with expectations, with total orders up 5.3% in Q4, and like-for-like sales up 2.7%.

It did warn that the recent budget has “significantly increased the cost of labour” for both itself and franchise partners. Although it has identified specific mitigation plans, Domino’s now believes that the annual impact for the group will hit £3m per annum from FY25 onwards.

Domino’s CEO, Andrew Rennie, said the new framework was a “vital step” in driving the chain’s future growth.

“The framework is good news for all our stakeholders,” Rennie added. “Having a five-year framework in place provides a strong platform for the long-term, sustainable growth of the brand, and will help us build a larger and more cash-generative business which will deliver stronger returns.

“It also means we will be well placed to address the headwinds all consumer-facing businesses will inevitably face in 2025 and will ensure we are in a strong position to thrive in the years that follow.”

AJ Bell investment analyst, Dan Coatsworth, commented that Domino’s shareholders would likely “appreciate the smooth delivery” of the new terms announced.

“It’s positive that these issues are agreed for a five-year period as that allows the company to plan for the medium term with a relative degree of certainty,” Coatsworth added. “Incentives to drive new store openings show Domino’s believes it can still grow and that it thinks the market is not yet fully saturated in the UK.

“Separately, the company has offered some reassurance on trading, although it notes an ongoing annual £3m cost from measures announced in the recent Budget – unsurprising given the nature of Domino’s workforce.”

---