Starting a Domino’s franchise in the UK can be a lucrative business venture, but it comes with its own set of costs, requirements, and guidelines that aspiring franchisees need to consider. Below is a detailed breakdown of the costs and other essential details for opening a Domino’s franchise in the UK.
Initial Franchise Fee
The initial franchise fee is the upfront cost you pay to join the Domino’s franchise system. This fee grants you the right to operate under the Domino’s brand and access to its established business model.
- Franchise Fee: £25,000 – £35,000 (depending on the location and market conditions).
Total Investment
The total investment to start a Domino’s franchise in the UK varies based on several factors, including the location of the store and the size of the premises. The cost covers the initial franchise fee, as well as other essential investments to set up the store.
- Total Investment: £250,000 – £500,000 This figure includes:
- Franchise Fee: £25,000 – £35,000
- Equipment & Store Fit-Out: £120,000 – £250,000 (cost of renovating and fitting out the store).
- Working Capital: £50,000 – £100,000 (for covering operational costs until the store becomes profitable).
- Other Costs: Includes expenses such as insurance, legal fees, and initial marketing.
Ongoing Royalties and Fees
In addition to the initial investment, franchisees are required to pay ongoing royalties and other fees to maintain the franchise agreement and access to the Domino’s brand and services.
- Royalty Fee: 6% of weekly sales. This is a percentage of the store’s gross sales and is paid to Domino’s.
- Marketing Fee: 4% of weekly sales. This fee goes towards funding national and regional marketing campaigns run by Domino’s.
Financing Options
Domino’s offers support for financing the franchise through third-party lenders. Many franchisees in the UK take out business loans or other forms of financing to help cover the costs of setting up the franchise. Some banks may offer loans specifically for franchise businesses, with repayment terms that are based on the franchise’s expected revenue.
Store Location and Size
The location of your Domino’s franchise can have a significant impact on the cost. High-footfall areas such as city centers or busy suburbs typically demand higher lease prices. Franchisees can choose between two store formats:
- Traditional Stores: A full-sized Domino’s store in a high-traffic location.
- Non-Traditional Stores: Smaller, delivery-only locations, which generally require a lower investment in terms of space and renovation.
The store size can range from 800 to 1,500 square feet, with larger stores often having higher setup costs due to their size and location.
Training and Support
Domino’s provides extensive training and ongoing support to ensure the success of its franchisees. Training covers all aspects of the business, from operations and food preparation to marketing and customer service.
- Initial Training: Franchisees and their management teams must complete a 6-week training program. This covers practical and theoretical training, both in-store and through online modules.
- Ongoing Support: Franchisees receive continuous support, including marketing materials, operational guidance, and access to a network of other franchisees.
Royalty Payments and Profit Potential
As a Domino’s franchisee, you’ll be required to make royalty payments based on a percentage of weekly sales. This is in addition to the marketing fee. While these ongoing fees can add up, the potential for profitability is substantial, particularly in high-demand areas. On average, a successful Domino’s franchise in the UK can expect annual sales of approximately £1,000,000 to £1,500,000, which would generate significant revenue after accounting for royalties, rent, and other operating costs.
Key Requirements for Franchisees
Domino’s has certain requirements for individuals interested in opening a franchise:
- Liquid Capital: You must have a minimum of £100,000 in available liquid capital.
- Net Worth: A minimum net worth of £250,000.
- Business Experience: Although not mandatory, prior experience in the food industry or in business management is advantageous.
- Commitment: Franchisees should be prepared to invest time and energy into running the business. Typically, franchisees are expected to take a hands-on approach in managing day-to-day operations.
Other Costs and Considerations
- Leasehold Costs: Depending on the location, leasehold costs (rent, utilities, etc.) can vary widely. A lease agreement of 5-10 years is common.
- Supply Chain Costs: Domino’s provides its franchisees with an established supply chain for ingredients and materials, but franchisees are responsible for covering their own supply costs.
Summary of Costs:
| Cost Type | Estimated Range |
|---|---|
| Initial Franchise Fee | £25,000 – £35,000 |
| Total Investment | £250,000 – £500,000 |
| Royalty Fee | 6% of weekly sales |
| Marketing Fee | 4% of weekly sales |
| Store Fit-Out & Equipment | £120,000 – £250,000 |
| Working Capital | £50,000 – £100,000 |
Disclaimer: The information provided is based on general guidelines and may vary. There is no guarantee of accuracy, as the costs and requirements for a Domino’s franchise can change over time. Please consult Domino’s UK or a franchise advisor for the most current and accurate details.