News

The Brandon effect

December 5, 2005

Editor's note: This article originally published in a longer form on PizzaMarketplace.com as Who's Who: Dave Brandon.

When Dave Brandon took over Domino's Pizza in 1999, he said the company was healthy. Now, it's in fighting trim.

The period immediately following Brandon's appointment as chairman and chief executive officer was a bit mysterious for store operators. With a background that included sales and management, they knew Brandon was a serious businessman. But they also knew he lacked real-life pizza experience, and that made them wonder how someone without it would alter the course of a company run for decades by its entrepreneurial founder.

Brandon put himself through the Domino's store employee training program, and then hit the road to visit hundreds of pizza stores in that first year. His mission, he said, was to open communication between him and the chain's operators, so he gave them his personal e-mail address and phone number.

"When he came, he didn't say what we were going to change, he just said that change is good," said Freddie Wehbe, a Domino's franchisee of five stores in Gainesville, Fla. "Now we understand, and I like his leadership. I really feel this is going to be a great company in a few years."

Brandon said first year's work helped establish positive rapport with the operators, and to reinforce that, he travels to a different market each month to hold town meetings with franchisees. He also works every New Year's Eve — one of the company's busiest nights — on the makeline in a Domino's shop.

By 2001, store-level employee turnover was down to about 100 percent, which he said was encouraging but not worth "bragging about yet." In 2005, that number slipped into the 90s. Store-level management turnover also is down significantly, from 60 percent to nearly 30 percent.

In 2004, Brandon led the company through its long-anticipated public offering, something owner Bain Capital brought him aboard to do. The stock opened at an uninspiring $14 a share, $1 below the price Domino's originally sought. Regardless, Brandon remained upbeat.

"It's far more important where we are in the future than we what we're doing at this particular hour," Brandon told MarketWatch reporter Steve Gelsi, during an interview in July of that year. "We didn't know what to hope for. ... The multiple we've been assigned is right up there with the comps that we really believe we belong with ... the McDonald's, Wendy's and Yums of the world. So we feel really good about our position."

Just a year later, however, Brandon had the last laugh when the stock hit $25 sooner than expected.

John Schnatter, founder and chairman of Papa John's, is even a Brandon admirer. The pair struck up a friendship several years ago and have a strong mutual respect, Schnatter said.

"Just because we're competitors doesn't mean we can't sit down and have a cup of coffee and talk about things that could benefit the industry," said Schnatter. "Dave is sincere about what he believes in, and I like that in him. And from what I'm seeing so far, he's done a really nice job at Domino's."