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locations in all 50 states and 55 countries. The company focuses on two core strengths: high quality pizza and fast delivery. Domino's business model sits on three pillars: 1) low cost delivery-oriented store design, 2) franchising and 3) a vertically integrated supply chain [9]. The company operates in three segments: domestic stores, domestic supply chain and international. Domestic Stores
About 90% of the company's 5,155 domestic stores are franchised
[12]
testing ground for new products and technologies which may then be passed onto franchisees. Domino's generates income from company-owned stores in the form of store profits; income from franchisees mostly comes from royalties. Domestic stores had revenues of $552.6 million and operating income of $128.6 million during 2007
[13]
. A vertically integrated supply system provides two important advantages to Domino's and its
franchisees. First, automatic delivery of raw materials cuts out a lot of the "back-of-store" activities letting store operators focus more on sales and customer service
[15]
leverage the purchasing power of thousands of company-owned and franchised stores nationwide which can help keep down food costs
[16]
. In fiscal 2007, the domestic supply segment generated revenues of $783.3 million and
[17]
International
Domino's international segment consists of 3,469 franchised stores outside the United States.
[18]
supply chain in a limited number of its international markets; the company operates six supply chain centers which manufacture dough and distribute food and supplies. Domino's international operation have consistently grown as a percentage of company locations and systemwide revenues; in 2007, the international segment accounted for 41% of Domino's store sales worldwide
[19]
franchise stores and is not percentage of company revenue.) During 2007, Domino's international segment generated revenues of $126.9 million, of which approximately 52% resulted from the collection of franchise royalties and fees, accounting for 93% of the segment's $57.2 million in operating income
[20]