Dec. 4, 2003
JERSALEM—The receiver for the Israeli franchisee of Domino's Pizza, Roni Matari, submitted a plan to a bankruptcy court on Dec. 4, to keep the chain running for three more months.
According to Haaretz Daily, the Domino's franchisee management, Umani Brandname Foods, and Bank Hapoalim—the main creditor of the Israeli franchisee—have approved the plan, which was based on a similar plan formed by management last February.
The recovery plan includes closing three of the chain's 25 branches and downsizing its logistical center, while launching new products and offering special deals. In addition, Matari plans to spend NIS 150,000 (U.S. $31,000) a month on advertising.
During the Dec. 4, hearing, Matari also asked the court to approve a NIS 1.8 million (U.S. $370,000) loan from Hapoalim to pay workers' salaries for November and part of December, as well as a NIS 1.7 million (U.S. $349,000) credit line. The credit line is needed because Israeli Domino's customers usually pay by credit card, delaying the chain's receipt of funds for a month.
Based on the plan, Domino's sales are expected to decline by NIS 400,000 (U.S. $82,000) a month during the three-month period. Nevertheless, Matari argued that it is essential to keep the chain running, because a temporary closure would cause customers to switch to other brands and complicate the inevitable sale of the franchise. The report said Matari wants to sell the chain quickly because waiting too long will hurt the company's market value.
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* Bankrupt Domino's Pizza Israel set for sale