rising to 5000 in 1989. according to the annual American Customer Satisfaction Index (ACSI). in 1978. Domino's Pizza is the recognized world leader in pizza delivery operating a network of company-owned and franchise-owned stores in the United States and international markets. the leading publication of the pizza industry. and things really began to cook. largest limited service restaurants.a permanent change to its core hand-tossed product. Sri Lanka and Bangladesh. It was re-christened Domino's Pizza in 1965. By 1983 there Were 1000 Domino's stores." The Domino's Pizza® brand was named a Megabrand by Advertising Age magazine. Domino's is listed on the NYSE under the symbol "DPZ. the company was known as Domino's Pizza India Limited and underwent a name change.ABOUT DOMINO’S PIZZA Founded in 1960. there are more than 9000 franchised and company owned stores in the United States and 60 international markets . HoDomino’sver. The company has been listed on the Indian btheses recently. In 2009. Domino's started out small with the legendary Tom Monaghan who bought his first pizza store and called it Dominick's. DOMINO’S IN INDIA Jubilant Food Works Limited. a Jubilant Bhartia Group Company holds the Master Franchisee Rights for Domino's Pizza for India. and recently debuted its 'Inspired New Pizza'. Today. Domino's has expanded its menu significantly since 2008 to include Oven Baked Sandwiches and BreadBowl Pasta. Nepal. Domino's ranked number one in customer satisfaction in a survey of consumers of the U. the 200th Domino's store opened.S. Domino's Pizza's Vision illustrates a company of exceptional people on a mission to be the best Pizza Delivery Company in the world. Prior to Sep 24. reinvented from the crust up with new sauce. rest of the terms remaining the 3 . cheese and garlic seasoned crust. 2009. Domino's Pizza was named "Chain of the Year" by Pizza Today magazine.

Domino's Pizza opened its first store in India in January 1996. 4 . According to the India Retail Report 2009. Consumers can order their pizzas by calling the single Happiness Hotline number 1800-111-123 (in most cities of Domino's Pizzas Presence) and 44448888 (in NCR. Domino's constantly strives to develop products that suit the tastes of the consumers and hence delighting them. at New Delhi. time and again it has been innovating with delicious new products such as crusts. Over the period since 1996. Mumbai and Bangalore). Domino's believes strongly in the strategy of 'Think global and act local'. great service. All the efforts. Hari S Bhartia and Jubilant Enpro Private Ltd. Domino's Pizza India has remained focused on delivering great tasting Pizzas and sides. toppings and flavthes suitable to the taste buds of Indian Consumers. The promoters of the company are Mr. Domino's vision is focused on " Exceptional people on a mission to be the best pizza delivery company in the world! ". The Brand Positioning of Khushiyon ki Home Delivery (Happiness Home delivered) is the emotional benefit it offers to the consumers. exceptional customer service and value for money offerings. Thus. It has endeavored to establish a reputation for being a home delivery specialist capable of delivering pizzas within 30 minutes or else FREE to a community of loyal consumers from all the stores around the country. Shyam S Bhartia. Domino’s initiatives such as Fun Meal and Pizza Mania have been extremely popular with consumers looking for an affordable and value for money meal option. Further providing value for money and affordable products to the consumers has been an important part of it’s efforts. superior quality. It was the largest Pizza chain in India and the fastest growing multinational fast food chain betDomino’sen 2006-2007 and 2008-2009 in terms of number of stores.same. offering consumers value for money deals. country wide presence or delivery in 30 minutes or free are all oriented towards delivering happiness to the homes of the consumers.000 people. Today Domino's Pizza India has grown into a countrywide network of more than 300 stores with a team of over 9. whether it is a new innovative and delicious product. It is committed to bringing fun. happiness and convenience to lives of the consumers by delivering delicious pizzas to their doorstep and efforts are aimed at fulfilling this commitment towards a large and ever-growing customer base. Mr.

MENU IN DOMINO’S VEGETARIAN SIMPLY VEG Margherita Cheese and Tomato pizza VEG I Double Cheese Margherita Fresh Veggie Country Special Farm House VEG II Peppy Paneer Mexican Green Wave Deluxe Veggie Gthemet FEAST PIZZA Veg Extravaganza NON-VEGETARIAN SIMPLY NON VEG Cheese And Barbeque Chicken NON VEG I Barbeque Chicken Spicy Chicken NON VEG II Chicken Mexican Red Wave FEAST PIZZA Meatzaa Keema Do Pyaaza Non Veg Extravaganza Chicken Golden Cheese And Delight Pepperoni SIDE ORDERS 5 .

 Strong store-level economics:. and generate demand for new stores. with minimal associated capital expenditures. it believes that simplicity and efficiency of operations gives it advantages over its competitors. This model is anchored by stong store-level economics. it has developed a focused growth and earnings model. with low capital requirements and a focused menu of quality. which provide an entrepreneurial incentive for franchise. At the store level. global and diversified franchise network that is critical component of its system-wide success and efficient pizza delivery.Over a 50. affordable pizza and complimentary side items.year old history. The franchise system in return has produced strong and consistent earnings through supply chain and royalty payments revenue. characterized by a delivery and carry-out oriented store design.It has developed a large. The franchise system network consists of 8284 stores. 55% of which are located in United States.VEGETARIAN Veg Mexican Wrap Veg Pasta Italiano White Veg Pasta Italiano Red Garlic Breadsticks Cheese Jalapeno Dip Cheese Dip Choco Lava Cake NON-VEGETARIAN Veg Mexican Wrap Veg Pasta Italiano White Veg Pasta Italiano Red Chicken Wings COMPETITIVE STRENGTHS OF DOMINO’S  Strong and proven growth and earnings model:.  Strong and Overall-diversified franchise system:.It has developed a cost-efficient store model. 6 .

 Internal dough manufacturing and supply chain system:. owner-operator franchises through royalty payments and revenues to vertically integrated supply chain system.  Strong brand awareness:. affordable pizza and complimentary side items. the vertically integrated dough manufacturing and supply chain system enhances the quality and consistency of the products and the relationship with the franchises.Domino’s pizza brand is one of the most widely known consumer brand in the world.In addition to generating significant revenues and earnings. Strong cash flow and earnings stream:. • emphasizes the ability to select. It also helps in leveraging economies of scale to offer loDomino’sr cost to stores and allows the store managers to better focus on store operations and customer service by relieving them of the responsibility of mixing dough in the stores. Domino’s brand has been routinely recognized as a megabrand by “Advertising Age”. Consumers associate the brand with timely delivery of pizza.A substantial percentage of the earnings are generated by the commited. BUSINESS STRATEGY OF DOMINO’S It intends to achieve further growth and strengthen the competitive position through the continued implementation of business strategy which includes the following elements: Continue to execute the mission statement:. It implements this by following a business strategy that:- • puts franchises and company owned stores at the foundation of all the thinking and decisions.develop and retain exceptional team members and franchises. 7 .The mission statement of Domino’s is “exceptional franchises and team members on a mission to be the best pizza delivery company in the world”.

• provides a strong infrastructure to support the stores. Additionally. affordable menu offerings.Domino’s plan to continue expanding the base of domestic stores to take advantage of 8 .  Expand and optimize the domestic store base :.Domino’s believes that the strength of the Domino’s Pizza® brand makes us one of the first choices of consumers seeking a convenient. will allow to grow the position in U. In 2007 Domino’s launched the campaign. simple operating model. had sales of $10. convenient store locations and quality. through which a majority of retail sales are generated. domino’s is also favorably positioned as a leader in carry-out given the strong brand. Domino’s may from time-to-time partner with other organizations in an effort to promote the Domino’s Pizza® brand.S.S. domino’s believes that convenient store locations. consumer-tested and profitable new product varieties (such as Domino’s Brooklyn Style Pizza and Domino’s Oven Baked Sandwiches). quality and affordable meal. complementary side items (such as buffalo wings. Additionally.Cola®.S. As the leader in U. Pizza delivery.S. pizza delivery. pizza delivery and carry-out are the largest components of the U.8 billion of sales in the twelve months ended November 2008. when coupled with the scale and share leadership. Domino’s Buffalo Chicken Kickers® and Cinna Stix®) and value promotions as through marketing affiliations with brands such as Coca.” which built on the Company’s 30-minute delivery heritage. cheesy bread. QSR pizza category. each of the domestic stores contributed 4% of their retail sales to the advertising fund for national advertising in addition to contributions for market-level advertising. pizza delivery.9 billion in the twelve months ended November 2008. While the primary focus is on pizza delivery.U. Domino’s intend to leverage the strong brand by continuing to introduce innovative. They are also highly fragmented. widely-recognized brand and efficient supply chain system are competitive advantages that position it to capitalize on future growth. Domino’s intend to continue to promote the brand name and enhance the reputation as the leader in pizza delivery. In 2007 and 2008. for 2007 the domestic stores within active co-operatives elected to allocate an additional 1% of their advertising contributions to support national advertising initiatives. • builds excellent store operations to create loyal customers.  Growing the leading position in an attractive industry :.  Leveraging the strong brand awareness :. “You Got 30 Minutes™. Domino’s believes these opportunities. Carry-out had $13.

are relatively small and are relatively inexpensive to build and equip. as store assets have long lives and updates 9 . they typically do not require expensive real estate.Domino’s believe that pizza has global appeal and that there is strong and growing international demand for delivered pizza. Domino’s believe that the store base in total for these ten markets is approximately half of the total long-term potential store base in those markets. almost exclusively through the master franchise model. Generally. STORE OPERATIONS Domino’s believe that the focused and proven store model provides a significant competitive advantage relative to many of the competitors who focus on multiple components of the pizza category. In the current top ten international markets. the franchise-oriented business model allows to expand the store base with limited capital expenditures and working capital requirements. Domino’s have been focused on pizza delivery for 48 years. as evidenced by the 3. The international stores have produced positive quarterly same store sales growth for 60 consecutive quarters. The stores also benefit from lower maintenance costs. Because the domestic stores and most of the international stores do not offer dine-in areas.the attractive growth opportunities in U. distribution and other incremental infrastructure costs. Domino’s believes that the scale allows to expand the store base with limited marketing. Domino’s believes that Domino’s continue to have significant long-term growth opportunities in international markets where Domino’s have established a leading presence. particularly dine-in. Domino’s have successfully built a broad international platform.726 international stores in more than 60 countries. While Domino’s plan to expand the traditional domestic store base primarily through opening new franchise stores.S. Domino’s will also continually evaluate the mix of Company-owned and franchise stores and strategically acquire franchise stores and refranchise Company-owned stores. pizza delivery.  Continue to grow the International Business :. the growing international demand for delivered pizza and the strong global recognition of the Domino’s Pizza® brand. Additionally. Domino’s believe Domino’s will achieve long-term growth internationally as a result of the favorable store-level economics of the business model.

Strategic store locations to facilitate delivery service Domino’s locate the stores strategically to facilitate timely delivery service to the customers. The Domino’s HeatWave® hot bag. keeps the pizzas hot during delivery. production-oriented store designs. production and delivery. or on or near college campuses. Domino’s PULSE™ point-of-sale system. The store layout has been refined over time to provide an efficient flow from order taking to delivery. Product and process innovations The 48 years of experience and innovative culture have resulted in numerous new product and process developments that increase both quality and efficiency. and is designed with a focus on efficient and timely production of consistently high quality pizza for delivery.are not frequently required. to evaluate and identify potential store locations and new markets. efficient order taking. accordingly. The stores are primarily production facilities and. include:• • • • • • • strategic store locations to facilitate delivery service. a sturdier corrugated pizza box and a mesh screen that helps cook pizza crust more evenly. cheesy bread and Cinna Stix®. Production-oriented store designs The typical store is relatively small. Domino’s use geographic information software. which Domino’s launched in 2008. vertically-integrated supply chain system. occupying approximately 1. Additionally. bread sticks. household demographics and visibility. These include the efficient. Domino’s have added a number of complementary side items to the menu such as buffalo wings. Focused menu 10 .300 square feet. which was introduced in 1998. Domino’s also continue to introduce new products such as Domino’s Oven Baked Sandwiches. Domino’s Buffalo Chicken Kickers®. product and process innovations.000 to 1. competitor locations. which incorporates variables such as traffic volumes. a focused menu. The simple and efficient operational processes. which Domino’s have refined through continuous improvement. and a comprehensive store audit program. The majority of the domestic stores are located in populated areas in or adjacent to large or mid-size cities. do not typically have a dine-in area.

Domino’s PULSE™ point-of-sale system The computerized management information systems are designed to improve operating efficiencies. bread sticks. The typical store also offers buffalo wings. The entire order taking and pizza production process is designed for completion in approximately 12-15 minutes. Most of the stores carry two or three sizes of Traditional Hand-Tossed. Domino’s require the domestic franchisees to install Domino’s PULSE™ and are in the process of installing Domino’s PULSE™ in the remaining domestic 11 . improves operating efficiency and maintains food quality and consistency. During 2008. The basic menu has three choices for pizza products: pizza type. pizza preparation. Domino’s added the new Domino’s Oven Baked Sandwiches to the menu that are available in fthe main varieties. conveyor-driven ovens). pizza size and pizza toppings. These operational processes are supplemented by an extensive employee training program designed to ensure world-class quality and customer service. which improves accuracy and facilitates more efficient order taking. • a delivery driver routing system. boxing and delivery. which improves delivery efficiency. Domino’s Buffalo Chicken Kickers®. consistent manner while maintaining the high standards of food quality and team member safety. which enable store managers to better focus on store operations and customer satisfaction. cooking (via automated. the proprietary point-of-sale system. Ultimate Deep Dish. and • enhanced online ordering capability. Domino’s believe that the focused menu creates a strong identity among consumers. quality offering to customers. Domino’s have installed Domino’s PULSE™.Domino’s maintain a focused menu that is designed to present an attractive. while minimizing order errors. Efficient order taking. Cinna Stix® and Coca-Cola® soft drink products. in every Company-owned store in the United States and significantly all of the domestic franchise stores. production and delivery Each store executes an operational process that includes order taking. It is the priority to ensure that every Domino’s store operates in an efficient. provide corporate management with timely access to financial and marketing data and reduce store and corporate administrative time and expense. Some enhanced features of Domino’s PULSE™ over the previous point-ofsale system include: • touch screen ordering. • improved administrative and reporting capabilities. cheesy bread. Brooklyn Style and Crunchy Thin Crust pizza. Domino’s also occasionally offer other products on a promotional basis. including Pizza Tracker which was introduced in 2007. and expediting the order taking and food preparation processes.

SUPPLY CHAIN OF DOMINO’S Domino’s operates in three business segments: 12 . Additionally. Domino’s believe that this store audit program is an integral part of the strategy to maintain high standards in the stores. Domino’s have installed Domino’s PULSE™ in over 1.000 international franchise stores. The audit program focuses primarily on the quality of the pizza the store is producing.franchise stores. the customer service the store is providing and the condition of the store as viewed by the customer. Comprehensive store audit program Domino’s utilize a comprehensive store audit program to ensure that the stores are meeting both the stringent standards as the expectations of the customers.

the domestic stores segment accounted for $511. marketing and other costs that are primarily borne by the franchisees. or 36%. and • International:. which operates 144 stores.• Domestic stores:. The international segment also distributes food to a limited number of markets from six dough manufacturing and supply chain centers in Alaska.The domestic stores segment consists of the domestic franchise operations. one supply chain center providing equipment and supplies to certain of the domestic and international stores and one vegetable processing supply chain center.726 international franchise stores in more than 60 countries. Domino’s maintain a close relationship with the franchise stores through regional franchise teams. In addition to generating revenues and earnings. an array of computer-based training materials that help franchise stores comply 13 . The principal sources of revenues from domestic store operations are Company-owned store sales and royalty payments based on retail sales by the franchisees. Domino’s use the domestic Company-owned stores as test sites for new products and promotions as Overall as store operational improvements and as forums for training new store managers and prospective franchisees. including the largest domestic franchisee. and provide financial analysis and store development services to the franchisees. of the consolidated revenues. The domestic franchises are operated by entrepreneurs who own and operate an average of three to fthe stores.6 million. which operate the network of 489 Company-owned stores located in the contiguous United States. which oversee the network of 4. While Domino’s continue to be primarily a franchised business. Hawaii and Canada (fthe).558 franchise stores located in the contiguous United States. The team members within these areas provide direct supervision over the domestic Company-owned stores. store operational audits and marketing services. and the domestic Company-owned store operations.The domestic supply chain segment operates 17 regional dough manufacturing and food supply chain centers. provide training. • Domestic supply chain:. The domestic Company-owned store operations are divided into eleven geographic areas located throughout the contiguous United States while the domestic franchise operations are divided into fthe regions. Domestic stores During 2008.The international segment oversees the network of 3. The domestic network of Company-owned stores also plays an important strategic role in the predominantly franchised operating structure. Only six of the domestic franchisees operate more than 50 stores. Domino’s also believe that the domestic Company-owned stores add to the economies of scale available for advertising. Domino’s continually evaluate the mix of domestic Company-owned and franchise stores in an effort to optimize the profitability.

convenient and cost-effective alternative. 14 . The domestic supply chain segment is comprised of dough manufacturing and supply chain centers that manufacture fresh dough on a daily basis and purchase.with the standards and franchise advisory groups communications betDomino’sen us and the franchisees. representing the largest presence of any QSR company in Mexico. and Domino’s produced over 273 million pounds of dough during 2008. 512 franchise stores in the United Kingdom. The information systems used by the domestic dough manufacturing and supply chain centers are an integral part of the quality service Domino’s provide the stores. which maximizes on-time deliveries.000 full-service deliveries in 2008 or betDomino’sen two and three deliveries per store. The domestic supply chain segment made approximately 575. or 54%. This profit-sharing arrangement generally provides domestic Company-owned stores and participating franchisees with 50% of their regional supply chain center’s pre-tax profits. Domino’s believe these arrangements strengthen the ties with these franchisees. Domino’s achieved delivery accuracy rates of approximately 99% during 2008. supplies and equipment from us because Domino’s provide the most efficient. the domestic supply chain segment accounted for $771. store and deliver quality pizza-related food products and complementary side items to all of the Company-owned stores and over 99% of the domestic franchise stores. Profits are shared with the franchisees based upon each franchisee’s purchases from the supply chain centers. Through the strategic dough manufacturing and supply chain center locations and proven routing systems. The supply chain center drivers unload food and supplies and stock store shelves typically during non-peak store hthes. of the consolidated revenues. Each regional dough manufacturing and supply chain center serves approximately 300 stores. Domino’s use routing strategies and software to optimize the daily delivery schedules. the domestic supply chain segment offers a profitsharing arrangement to stores that purchase all of their food from the domestic dough manufacturing and supply chain centers. generally located within a one-day delivery radius.4 million. eight product groups account for over 90% of the volume. or 10%. per Domino’sek. International During 2008. Domestic supply chain that facilitate During 2008. while also providing both quality and consistency. Domino’s have 592 franchise stores in Mexico. of which.1 million. In addition. of the consolidated revenues. 412 franchise stores in Australia. which minimizes disruptions in store operations. the international segment accounted for $142. receive. Domino’s regularly supply approximately 5.000 stores with various supplies and ingredients. Domino’s believe that the franchisees voluntarily choose to obtain food.

216 domestic franchisees. which enables franchisees to benefit from the brand name with a relatively low initial capital investment. Domino’s have grown by more than 1. only six of the domestic franchisees operated more than 50 stores.558 domestic franchise stores Were owned and operated by the 1. has attracted a large number of motivated entrepreneurs as franchisees. 2008 in the top ten international markets. including the largest domestic franchisee. 2008. Domino’s empower the managers and franchisees to adapt the standard operating model. to satisfy the local eating habits and consumer preferences of various regions outside the contiguous United States. Domino’s believe that the international franchise stores appeal to potential franchisees because of the Overall-recognized brand name. The principal sources of revenues from the international operations are royalty payments generated by retail sales from franchise stores and sales of food and supplies to franchisees in certain markets.200 international stores over the past five years.305 franchise stores in South Korea. Taiwan and Turkey. Number of stores Mexico 592 United Kingdom 512 Australia 412 South Korea 305 Canada 296 India 227 Japan 181 France 140 Taiwan 120 Turkey 106 The franchise program As of December 28. which account for 78% of the international stores. the 4. within certain parameters. The success of the franchise formula. 2008. most of the international stores are operated under master franchise agreements. the average domestic franchisee operated approximately three to fthe stores and had been in the franchise system for tDomino’slve years. 227 franchise stores in India and over 100 franchise stores in each of Japan. the limited capital expenditures required to open and operate the stores and the system’s favorable store economics. Currently. At the same time. 296 franchise stores in Canada. Domestic franchises 15 . and Domino’s plan to continue entering into master franchise agreements with qualified franchisees to expand the international operations in selected countries. As of December 28. The following table shows the store count as of December 28. France. which operates 144 stores.

As a result. In addition.5% royalty fee on sales. subject to state law. Each domestic franchisee selects the location and design for each store. Domino’s require all domestic franchisees to complete initial and ongoing training programs provided by us. under the standard domestic franchise agreement. Franchise training and support Training store managers and employees is a critical component of the success. subject to the approval. which focuses the franchisees’ attention on operating their stores. Under the current standard franchise agreement. Domino’s have the contractual right. subject. Domino’s assign an exclusive area of primary responsibility to each franchise store.Domino’s apply rigorous standards to prospective franchises. Domino’s generally require prospective domestic franchises to manage a store for at least one year before being granted a franchise. but not limited to. to loDomino’sr rates based on area development agreements. the vast majority of the franchisees come from within the Domino’s Pizza system. sales initiatives and new store incentives. the franchisee is required to pay a 5. During the term of the franchise agreement. Domino’s believe these standards are unique to the franchise industry and result in qualified and focused franchisees operating their stores. Franchise store development Domino’s provide domestic franchisees with assistance in selecting store sites and conforming the space to the physical specifications required for a Domino’s Pizza store. to terminate a franchise agreement for a variety of reasons. Domino’s currently have a franchise contract renewal rate of over 99%. Franchise agreements Domino’s enter into franchise agreements with domestic franchisees under which the franchisee is granted the right to operate a store in a particular location for a term of ten years. including. in limited instances. This enables us to observe the operational and financial performance of a potential franchisee prior to entering into a long-term contract. based on accessibility and visibility of the site and demographic factors. a franchisee’s failure to make required payments when due or failure to adhere to specified Company policies and standards. domestic franchisees are required to implement training programs for their store employees. Domino’s provide design plans and sell fixtures and equipment to most of the franchise stores. Domino’s also generally restrict the ability of domestic franchisees to become involved in other businesses. with options to renew for an additional term of ten years. including population density and anticipated traffic levels. Domino’s assist the 16 .

consumer behavior and laws. marketing assistance and consultation to franchisees who experience financial or operational difficulties. decor and signs. In select regions or countries. The master franchise agreements generally grant the franchisee exclusive rights to develop or sub-franchise stores and the right to operate supply chain centers in a particular geographic area for a term of ten to tDomino’snty years. Domino’s also seek candidates that have access to sufficient capital to meet their growth and development plans. materials. the master franchisee is required to pay a continuing royalty fee as a percentage of retail sales. Each franchisee has full discretion to determine the prices to be charged to customers. Prospective master franchisees are required to possess or have access to local market knowledge required to establish and develop Domino’s Pizza stores. Domino’s have established several advisory boards. In addition. Marketing operations 17 . supplies. Franchise operations Domino’s enforce stringent standards over franchise operations to protect the Domino’s Pizza® brand.domestic and international franchisees by making training materials available to them for their use in training store managers and employees. which varies among international markets. The local market knowledge focuses on the ability to identify and access targeted real estate sites along with expertise in local customs. ingredients. The agreements typically contain growth clauses requiring franchisees to open a minimum number of stores within a specified period. culture. including training. through various newsletters and through face-to-face meetings. which include matters such as menu items. one-time franchise fee as Overall as an additional franchise fee upon the opening of each new store. Domino’s also provide ongoing support to the franchisees. Domino’s also maintain communications with the franchisees online. comprehensive operations manuals and franchise development classes. Domino’s franchise directly to individual store operators. The master franchisee is generally required to pay an initial. standards and specifications. including computer-based training materials. through which franchisees contribute to developing systemwide initiatives. with options to renew for additional terms. All franchisees are required to operate their stores in compliance with written policies. International franchises The vast majority of the markets outside of the contiguous United States are operated by master franchisees with franchise and distribution rights for entire regions or countries. services. furnishings.

marketing efforts are primarily the responsibility of the franchisee in each local market. It’s Domino’s. or DNAF. By communicating a common brand message at the national. the not-for-profit advertising subsidiary.®” and the current marketing campaign with the slogan “You Got 30 Minutes. which allows us to maximize leverage with the suppliers when items are put out for bid on a scheduled 18 . Domino’s believe that two factors have been critical to maintaining longlasting relationships and keeping the purchasing costs low. Domino’s estimate that domestic stores have invested approximately $1. including targeted database mailings. The suppliers are required to meet strict quality standards to ensure food safety. Domino’s are one of the largest domestic volume purchasers of pizza-related products such as flthe. DNAF also provides cost-effective print materials to the domestic stores for use in local marketing that reinforce the national branding strategy. talent payments and other activities supporting the Domino’s Pizza® brand.The domestic stores generally contribute betDomino’sen 4% to 5% of their retail sales to fund national marketing and advertising campaigns. commercial production. among other actions. Domino’s review and evaluate the suppliers’ quality assurance programs through. sauce and pizza boxes.™” Over the past five years. Domino’s assist international franchisees with their marketing efforts through marketing workshops and sharing of best practices and successful concepts. Additionally. In addition to the national and market-level advertising contributions. onsite visits. First. domestic stores spend additional amounts on local store marketing. Third-party suppliers Domino’s have maintained active relationships of 15 years or more with more than half of the major suppliers. The funds remitted to DNAF are used primarily to purchase television advertising. These national and market-level funds are administered by Domino’s National Advertising Fund Inc. Internationally. third party audits and product evaluations to ensure compliance with the standards.4 billion on national. field communications. This is evidenced by the successful previous marketing campaign with the slogan “Get the Door.. Domino’s create and reinforce a poDomino’srful. local market and store levels. Domino’s believe that the length and quality of the relationships with suppliers provides us with priority service and quality products at competitive prices. cheese. but also support market research. saturation print mailings and community involvement through school and civic organizations. local and co-operative advertising. the domestic stores also generally contribute to market-level media campaigns. in those markets where Domino’s have co-operative advertising programs. public relations. Domino’s may from time-to-time partner with other organizations in an effort to promote the Domino’s Pizza® brand. In addition to the required national advertising contributions. consistent marketing message to consumers.

The pricing schedule is directly correlated to the CME block cheddar price. however it does not currently anticipate disruptions in our supplies. and domino’s has historically been able to pass increased costs and savings on to stores. sauces and other ingredients are sourced from various suppliers. the Company entered into a new arrangement with this supplier. Domino’s currently purchase the pizza cheese from a single supplier. Each supply category is evaluated along a number of criteria including value of purchasing leverage. 2003 for the contiguous United States. Prices charged by suppliers are subject to fluctuation. Domino’s have the right to terminate these arrangements for quality failures and for uncured breaches. the supplier agreed to provide an uninterrupted supply of cheese and the Company agreed to a five year pricing period during which it agreed to purchase all of its primary pizza cheese for the Company’s United States stores from this supplier or. The current economic environment has created additional financial pressures for some of the suppliers. Domino’s believe that alternative suppliers for all of these ingredients are available. Domino’s also entered into a multi-year agreement with Coca-Cola effective January 1. Domino’s continually evaluate each supply category to determine the optimal sourcing strategy. pay to the supplier an amount reflecting any benefit previously received by the Company under the new pricing terms. Under this arrangement. The contract provides for Coca-Cola to be the exclusive beverage supplier and expires on the later of December 31. 19 . consistency of quality and reliability of supply to determine the appropriate number of suppliers. Second. Domino’s use a combination of single-source and multi-source procurement strategies. alternatively. The majority of the meat toppings come from a single supplier under a contract that began in July 2008 and expires in July 2010. restaurant supplies or products. It may periodically enter into financial instruments to manage the risk from changes in commodity prices. 2009 or such time as a minimum number of cases of Coca-Cola® products are purchased by us. Domino’s do not believe that such additional costs would have a material adverse effect on the business. and all of the pizza boxes. In 2007.basis. The Crunchy Thin Crust dough is currently sourced by another single supplier pursuant to requirements contracts that expire in 2009. It has not experienced any significant shortages of supplies or any delays in receiving our food or beverage inventories. Domino’s does not engage in speculative transactions nor does it holds or issue financial instruments for trading purposes. While Domino’s may incur additional costs if Domino’s are required to replace any of the suppliers.

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