Is Domino's In Trouble? This Franchisee Just Closed Over 200 Stores

For years, Domino's has been the largest pizza company in the world, but it's now undergoing a significant change in business. A major franchisee recently announced the closure of 205 locations across its international portfolio due to low sales figures — as reported by QSR. Fortunately for American fans of Domino's, however, the vast majority of the restaurants slated to close are in Japan.

Domino's Pizza Enterprises is the world's largest franchisee of Domino's Pizza locations. It holds the master franchise rights to Domino's across several continents — in countries including France, Malaysia, Germany, and its home market of Australia, where Domino's Pizza Enterprises is the largest chain of its kind in the country. Domino's Pizza Enterprises' biggest single market is Japan, with approximately 950 Domino's locations across the country, but the upcoming closures will reduce that number by a considerable 172 stores. The other 33 locations to be closed are found in other countries.

In the U.S., the biggest single franchise-holder for Domino's is RPM Pizza. This family-owned company owns over 175 Domino's locations across five states, and it has not recently announced any closures in its markets. With 6,906 locations in the U.S. and impressive growth, Domino's has been named one of the fastest-growing fast food chains in the country (per Insider Monkey). Suffice to say: Domino's looks more than safe in the U.S.

Overall, Domino's has seen modest but consistent growth in same-store sales in recent financial quarters, though the corporation has acknowledged that the takeout pizza market is tight. And Domino's Pizza Enterprises is no exception to these broader trends.

Many of its most underperforming stores opened during the COVID-19 pandemic, when people were ordering delivery and carryout often, but subsequent changes in consumer habits zapped these stores of their profit margins. As customer demand decreased and overhead expenses increased, Domino's Pizza Enterprises simply chose to focus on its stronger locations and more promising new markets.

Domino's is, of course, not the only restaurant chain to face major changes as a result of the COVID-19 pandemic, even as the world moves on from the dark days of 2020. Although they were already an endangered species, McDonald's PlayPlaces experienced pandemic-era closures that turned out to be permanent. And the iconic diner chain Denny's announced it would close 150 restaurants due to similar post-pandemic changes in customer behavior, from which Domino's is also suffering.