GROWTH OF FAST FOOD CHAINS IN INDIA

KFC, Pizza Hut and Domino’s are just three examples of the many fast food chains operating

in India. In the past few years, the food sector has taken a huge leap as far as the growth of

the food sector is concerned and especially in the fast food segment. Every corner of the

street today has stalls or shops, small or big, operating and growing.

As far as the huge food chains are concerned, they basically operate in malls in big cities or

metropolitan cities whereas in smaller cities like Lucknow, Jaipur, etc. they not only operate

in malls but they have actually opened up as dine in restaurants. “It wouldn’t make sense if

we positioned ourselves merely as a convenience, delivery brand,” explains Ajay Kaul, MD,

Domino’s India. Taking a cue from McDonald’s runaway success of Rs 20 burgers and Rs 7

ice-cream cones, Pizza Hut too introduced a heavily Indian zed menu with prices starting as

low as Rs 75.

Home delivery is another system which has started spreading branches in India with the

facility being made available at the speed of order delivery in half an hour. Nearly 65% of

Domino’s revenues come from home deliveries and the segments dominance is expected to

continue. “As our urban life continues to get busier, home deliveries will become more

popular. But in smaller markets dine-in will drive growth,” adds Ajay Kaul. All the major

MNC fast food chains such as McDonald’s, Yum! (which owns the KFC and Pizza Hut

brands), and Domino’s are fast changing their stripes and business models in India.

Such chains are targeting not only the non-vegetarians but also the vegetarians; earlier there

was nothing to allure them at places like KFC. But things changed accordingly.

“We found that the vegetarians in such groups were always finicky and as a result had the

veto power to decide where they should eat. We want KFC to appeal to everybody.

Vegetarians and non-vegetarians,” says Arvind Mediratta, chief marketing officer, Yum

Brands India. Although KFC still gets just about 15% of its revenues selling vegetarian items,

it has significantly increased the number of veg offerings on its menu.

Thus, the tremendous growth of such sectors do make one wonder whether there will be a

point when pizzas and burgers take over the rest of the Indian cuisines (including quick

snacks) or is it just that we are too busy to ape our western counterparts and satisfy ourselves

with the feeling that even we have an international taste that makes us at par with the rest of

the crowd. There is actually nothing wrong with having “International taste” but as wise

people always say “One should never forget one’s roots and should always go for a reality

check time and again”.

Above we had taken into considered the fast food industry growth rate in India

Let us further take a look at the career opportunities in this industry and how in one of the

company training and development of crew members are conducted.

INTRODUCTION

Tom Monaghan and his Brother James by “DomiNick's”, a pizza home delivery store located

in Ypsilanti, Michigan, in the north of the United States.

Tom Monaghan renames his company “Domino’s Pizza, Inc.”.

The 200th Domino’s Pizza store opens.

Domino’s Pizza sets out to conquer the world.

Domino's opens its 5,000th store.

Domino's Pizza establishes its presence on the Belgian market.

Domino's launches its Web site (www.dominos.com).

Domino's Pizza opens its 1,500th store outside the United States, opening seven stores in one

day on five continents. The company also adopts a new brand image, supported by a

campaign - "Image 2000" - to introduce its new logo and store concept, designed to be both

more human and contemporary.

The company opens its 6,000th store, in San Francisco, California. At the end of 1998,

holding company Domino's Pizza International intervenes directly to relaunch the brand in

France, so as to make the best possible use of resources and, at the same time, enable its

stores to take full advantage of the company’s expertise. Tom Monaghan, founder of

Domino's Pizza, announces that he is to retire, selling his 93% stake in the company to Bain

Capital, Inc.

Domino's Pizza International now has 1,986 stores located outside the USA, 33 of them in

France.

With 6,598 out lets spread throughout the world and sales in 1999 of $3.4 billion, Domino's

Pizza ranks fifth among the major American fast food concerns active internationally, making

it the world's largest pizza home delivery company.

Control of Domino’s Pizza Belgium is transferred to master franchisor Domino’s Pizza

Entreprises, bringing together the company's interests in France, Belgium, the Netherlands,

Australia and New Zealand. Domino's Pizza buys the Alvolo chain, converting seven of the

company’s outlets to the Domino's format and brand.

Domino’s Pizza buys the Pizza Company chain.

Domino’s Pizza celebrates its 50th anniversaire!

BACKGROUND

Jubilant Foodworks was founded in 1995 and the company opened its first Domino's pizza

store in January 1996.The Domino's brand was founded in the United States of America in

1960 by Thomas and James Monaghan. Since then, that business has grown into a global

network of over 8,500 pizza stores in more than 60 countries, involving over 2,000

franchises.Jubilant Bhartia Group holds the master

franchisee rights for the Domino's Pizza brand and

operations for the whole of India, Nepal, Sri Lanka and

Bangladesh. The company will continue to use the brand

name of 'Domino's Pizza' for marketing and other related

purposes

DOMINO’S PIZZA INDIA

When Domino’s entered India in 1995, Pizza was quite low on the taste palate of Indians.

Fourteen years and 274 stores later, brand Dominos seems to be on a roll, having not only

made pizzas popular with the country’s burgeoning middle class, but also the brand

omnipresent. In an interview with Amit Sharma, Domino’s Pizza India VP, marketing, Dev

Amritesh, shares the brand’s India journey and the company’s plans for India. Excerpts:

From being a foreign snack to being a meal option, how has Domino’s shaped Indian

consumers’ perception of the pizza?

We have constantly focused on consumer-centric areas such as product innovation, taste,

pricing and customer service. Our several products innovations such as Double Cheese

Crunch Pizza, Kebab Pizzas, Cheese Burst Pizza, Domino’s Calzone, Chicken Wings

amongst others, and most recently Pasta, have gone down well with the consumers. As the

result, we have been able to get quick product acceptance from them and often that is the first

and most important bridge that a foreign food category has to cross. On the other hand, offers

like, Pizza Mania at Rs 35/- per Pizza and Fun Meal for 4 has helped us drive value-formoney

proposition allowing access to the brand. We have realised that value for money is an

extremely important need for Indian consumers, especially in the context of the food services

market. Then our 30 minutes or free service guarantee gives a differentiated edge to our

brand amongst the Indian consumers.

Where does the brand Domino’s stand in India and what is the strategy to take it to the

next level?

Domino’s Pizza has a widespread presence through a network of 274 stores, spread across 55

cities in 20 states. Further, our thirty minutes or free promise helps us reinforce our position

within the delivery market. It’s no surprise then, we are the leaders in the organised pizza

home delivery segment, with a market share of 65%, according to the Food Franchising

Report 2009. Now, we seek to increase our penetration through new store openings in

existing cities where we operate stores. The Technopak Report 2009 estimates that only 2%

of the monthly expenditure on food bought from outside or ordered-in by households in India

is spent on pizzas and pastas on a monthly basis. We see that as a opportunity to capitalise on

low penetration.

How much of a challenge has it been to market a pizza brand in India?

Over the last two years, our sales revenue has grown by more than 100%. Also, the average

same store growth in the last three fiscals has been around 16%. Our initiatives in the area of

brand building, product innovation and penetration coupled with the changing demographics

in the country have helped. Some of the factors that have driven growths and perception of

Pizzas as a meal option have been changing lifestyles, rising incomes, especially amongst

youth, growing middle class and nuclear families and increase in working women population.

So, while there are challenges in every market, the manner in which brands overcome them is what

matters.

DOMINO’S PIZZA VISION

The domino’s pizza vision statement is our goal and the guiding principles explain how we

do business.

‘’Exceptional people on a mission to be the best pizza delivery company in

the world’’

Demand integrity

Our people come first

We take grate care of our customers

We make great pizza everyday

We operate with smart hustle and positive energy

Estimated delivery time

Load time

Outdoor time

Drivers in time

Job description is a written statement

showing job title, tasks, duties and

responsibilities involved in a job. It also

prescribes the working conditions, hazards,

stress and relationship with other jobs.

Job specifications, also known as man or employee specifications, is prepared on the basis of

job specification. It specifies the qualities required in a job incumbent for the effective

performance of the job.

Once the Job Analysis is done the job vacancy can be posted on the Company Intranet,

Classifieds, Job portals, Recruitment agencies etc.

Dominoes pizza

Every firm whether small or large needs people to do even the minutest clerical work for

them. And when there are employees they need to be managed. A small/medium firm may

not have a devoted HR department. In that case, the owner or the manager plays the role of

the HR head or the firm may hire specialized services of a HR Consultancy.

Whereas, large organizations have their own HR department consisting of a head and staff

that directly reports to the head. The HR department may have further bifurcations depending

on the size of the firm and the number of employees.

When we say we require people for the functions of business, how do we acquire people for

these functions? This is done by RECRUITMENT. For recruitment to happen the company

has to do a Job Analysis of the job to be assigned to an eligible candidate. Job Analysis is

further bifurcated into 2 sub-parts i.e.

Franchise team members must abide by any and all standards established by Domino’s Pizza,

India Ltd. Franchise may establish additional policies and procedure. Team members should

consult their franchise for clarification

JOB ANALYSIS:

This is not a book definition so to say but in layman’s language, Job Analysis means a

process where the company analyses and defines the skills required to perform a particular

job in the company.

POLICIES AND INFORMATION

Recruitment is the step towards Selection. Generally recruitments are either taken care by the

HR Department Head or the manager (whoever is responsible for hiring). There is a process

for hiring a candidate that is usually to be followed in large organizations. When there is a

requirement, the HR department is communicated about the same.

The HR department then goes through the database of candidates it has or it would send the

requirements through Classifieds, Job portals, etc. By sending these requirements, the

organization is likely to get feedback from eligible candidates in the form of CVs. The

requirement advertisement should mention the Job Analysis (Job Description and Job

Specification) so as to avoid attracting unnecessary applications.

This also makes it easier for the HR department to shortlist from the applications and this will

help reduce any bias from the HR resulting due to over examining the applications, boredom,

etc. Recruitment and Selection are two different terms even though they are always

mentioned together. After the recruitment process is accomplished it gives way to the

selection process.

Selection process takes place after the HR department has shortlisted from among the

received applications. The selection is not a lengthy procedure but depends from organization

to organization. The recruitment process is important in order to avoid any mistakes that

would lead to future problems for the company from the candidate’s end. It’s a saying we

have heard in our childhood, “one dirty fish pollutes the entire pond.” Similar is the case with

employees. One wrong employee in the organization may hamper the growth of the entire

organization. The training material is being provided to help store team members understand

their functions and responsibilities. These materials are intended to complement existing

Domino’s Pizza standards. They are not intended to override or replace existing or future

company standards.

We all have heard that, “Employees are assets of a company.” Every company claims to

follow and understand this mantra. The function of HR is all about people- managing them,

hiring them, etc. To carry out any function in a business, be it marketing, production,

operations, you need people.

HR brings the people to the organization and its business. It is said marketing is promoting

your product in the market place. Similarly, HR is promoting and selling your company in the

market. If you can promote your company efficiently you are sure to attract people to work

for you.

When not taking steps to "Avoid the Noid," the leadership and organizational development

team at Domino's Pizza incorporates technology into its overall leadership development

efforts to facilitate a blended learning approach.

With more than 8,000 locations in more than 54 countries, Domino's needs a cost-effective

way to reach out to a broad audience to support leadership development. Offering a variety of

programs through its homegrown learning portal, DPZ University (which houses e-learning

content from a variety of vendors), accomplishes this strategic objective.

"The nice thing about this is, from home, at night, I can access it; I don't have to be at work,"

said Patti Wilmot, executive vice president of PeopleFirst, Domino's Pizza's training

program. "With the business that we run, a lot of our team members work odd hours,

particularly our leaders that run our stores. This gives them the opportunity to do it in the

morning or whenever they want to do it."

"This allows us to put tools in the hands of each and every one of our leaders in an instant,

and now we've got a very broad reach out into the marketplace, across this building, into our

distribution centers and out into the stores," Kissinger said. "Otherwise, we were challenged

in having large infrastructures and training departments."

Wilmot said the bottom is where it's most useful.

"It's primarily for an early-career leader. Maybe it's their first time managing people, and he

or she is having an issue with someone around attendance or has lack of results-oriented

performance management skills," she said. "They can go in and get some quick tips on how

to sit down with this team member and have a good one-on-one discussion to address those

skill deficiencies."

PIZZA MAKING TRAINING

Domino’s Pizza India has remained focused on delivering

great tasting Pizzas and sides, superior quality, exceptional

customer service and value for money offerings. Domino's

have endeavoured 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 our stores around the country.

Target time

Resource needed

Key learning points

Read & practice

Skill check

Read & observe:

1. Grab the correct portion from the make line bin2. Evenly spread the topping over the pizza3. Use both hand so you can go more quickly4. Check quality of the item5. Place items on the belt outside the oven6. Try to take the correct portion of cheese from

the bin in one or two grab7. Put items to one side of the belt so that two

items can be baked side by side.

PIZZA DELIVERY TRAINING

When you drive down the road:

1. Delivery troubleshooting

2. Payment at the door

3. Driver check in and drop

4. Driver check out

5. At the door

Count out full change, starting from the smallest coins to the largest notes don’t assume the tips.

Take the credit card slip and a pen on the delivery

Swipe the card or imprint it on the slip and get the customers signature.

Treat credit card slips like cash, depositing them in the drop box.

To ensure great customer service as well as your safety at all times, you must be ready to handle all type of situations on delivery

BOX FOLDING AND STORAGE

1. Fold the lid so that the flaps go behind and over the bottom flaps

2. Ask your manager how to apply box tops

3. Store boxes by size with groups stacked on top of each other, when the manger takes

inventory he or she can quickly count the groups to figure out how many boxes are in

stock

4. A box is a food contact surface like a dinner plate or

pizza cuter so must be store on clean rack or shelf

5. During the shift, keep the front of the cut table stocked

with pizza and side boxes.

ORDERING

1. Answering the phone is 1 priority

2. Telephone etiquette

3. Phone script

4. Telephone hold procedure

5. Suggestive selling

6. Takeaway customer priority

and ordering

7. Takeaway payment transaction

OTHER TRAINING

Personal hygiene

Personal safety

Hand washing

Chemical safety

Total satisfaction guaranteed

Drive defensively

Box labelling

Telephone procedure

Sink setup

Maps and delivery areas

Using hot bags

Primary training:

1. Suggestive selling

2. Cleaning and sanitizing

3. Sweeping and mopping

4. Cleaning the bathroom

5. Prepping, dating and self life

6. Prepping chicken products

7. Using a scale

8. Cleaning the oven

9. Pizza saucing

10.Cleaning beverage cooler

HR DEVELOPMENT PROGRAM

Domino’s fast-paced global business requires support from strong HR professionals with a

broad range of experiences. The HRD Program was designed to develop and prepare future

Domino’s human resource leaders.

During the program you will work in a series of rotational assignments. We’ll work together

to specifically select these roles to help you achieve your long-term career goals and

strengthen your credibility as a strategic business partner.

These positions are held during the first 3-4 years of your Domino’s Pizza career and require

company sponsored relocation(s).

Then what?

Anything! After learning our business

model from the ground up, you will be

uniquely prepared to move into any number

of other roles in our People First Team.

We’ll work together to specifically select

these roles to help you achieve your long-term career goals. While participants can move into

any area of our business, some of the most popular opportunities are with the employee

relations, recruiting, and compensation and benefits teams.

Foodservice. This award has been bestowed by Indian Retail forum at the 8th annual Images

Retail Award.

Mr. Basab Bordoloi won HR leadership award in Asia’s Best Employer Brand Awards - 2010

by World HRD Congress.

Mr. Basab Bordoloi won "Most Powerful HR Professional of India" award in Asia’s Best

Employer Brand Awards - 2010 by World HRD Congress.

Jubilant FoodWorks Ltd won the award for ’Continuous Innovation in HR Strategy at work’

in Asia’s Best Employer Brand Award - 2010 by World HRD Congress.

Ranked 9th Best Employer 2009 in India in Hewitt’s Best Employers survey 2009.

Ranked amongst the top 25 best employers across Asia pacific market, which includes

Australia/New Zealand, China, India, Hong Kong, Malaysia, Korea & Singapore, in Hewitt’s

Best Employers survey 2009.

Best employer in Retail and 3rd best employer in Services category in India - Hewitt’s Best

Employers survey 2009.

HR leadership award - 4th Employer Branding Award 2009 - 10

Regional Best Employer in hospitality by the "World HRD Congress" in 2009-10.

FUN @ Work award by the "World HRD Congress" in 2009-10

Highest employee engagement score amongst the "best companies" in BT-TNS-MERCER’s

"Best companies to work" in India survey.

Featured as "Fun place to work for" by Outlook Business in 2010.

LEADERSHIP DEVELOPMENT PROGRAM

Anything! After learning our business model from the

ground up, you will be uniquely prepared to move into

any number of other roles in the company.

We’ll work together to specifically select these roles to

help you achieve your long-term career goals.

While participants can move into any area of our

business, some of the most popular opportunities are in our International, Franchise

Development and Operations, Marketing and Supply Chain Services departments.

“The goal of the Leadership Development Program is clear for us…we’re using it to develop

the future leaders of this company. We find bright, highly motivated students and then give

them the training and development opportunities they need to become extraordinarily

successful at Domino’s. It’s clear to me that many of the Pipeliners will reach the highest

levels in management at Domino’s.”

IN STORE TRAINING IN DOMINO’S

At the heart of our learning and development is store skill training. Our store team members

receive extensive training that prepares them for "making, baking and taking" pizzas.

Advancement from Drivers and Customer Service Representatives to Assistant Managers

and General Managers is achieved by completing our Crew Training Program on leadership

and running the business.

Crew and Assistant

These workbooks cover every topic you need operational training for: Product quality, safe

delivery, customer service, cost controls and sales building. Book 1 includes an audio CD

and store tour. Book 2 includes a multimedia CD with the old CBT classes for sanitation and

product quality. Book 3 includes a multimedia workbook, action planning projects and

classroom modules, including SMAC objectives, P&L and leadership.

Assistant Manager Classroom

We have eight new two-hour classroom training workshops to cover critical Book 2 topics

such as safety & security, product quality, sanitation/equipment maintenance, customer

service, opening/closing, sales building, cost control, and PeopleFirst.

High Performance General Manager

This two-day interactive learning experience revolves around goal setting and training in the

areas of operator, customer, sales builder, leader and trainer.

Effective Supervision, at the World Resource Center

The Effective Supervision class is a three-day workshop specifically designed for Domino’s

Pizza multi-unit franchisees and supervisors. Its highly-interactive format includes a special

leadership segment from CEO Dave Brandon called “The Team, The Team, The Team.”

Other topics include: the role of the supervisor, the eight types of effective store visits,

planning a productive and effective week, how to conduct effective AM and GM meetings,

internal theft detection and investigation, and building a strong bench.

Domino’s Pulse Training, at the World Resource Center

This new three-and-a-half-day class covers everything from preparing for your first shift to

team member check out to menu and labor management.

OVERVIEW OF BUSINESS

According to the India Retail Report, 2009, Dominos is the largest pizza chain in India and

one of the fastest growing multi-national fast food chains between 2006-2007 and 2008-2009,

in terms of number of stores. The Food Franchising Report 2009 has estimated that it is one

of the largest and fastest growing international food brands in South Asia and the market

leader in the organized pizza home delivery segment in India with over 65% market share. As

of August 31, 2009, the company has operated 274 stores in India located in 20 states and

union territories, including in 55 cities across the country, and, through a sub-franchisee, five

stores in Sri Lanka.

On an average, 1.81 million pizzas, including add-ons such as garlic bread and cheese dip but

excluding beverages ("Add-ons"), were sold each month throughout the pizza stores in India

in fiscal 2009 and for the three months ended June 30, 2009, 2.36 million pizzas (including

Add-ons) were sold each month. The company operate as of August 31, 2009, four regional

supply chain centers, or commissaries, located in Noida (Delhi NCR), Mumbai, Bangalore

and Kolkata.

They have recently renewed their contract with master franchise controller Dominos

International. The new contract is for 15 years, it gives them exclusive rights for operations in

India, Nepal, Sri Lanka and Bangladesh.

Objects of the issue

The issue comprises of 2.27 crores equity shares of face value of Rs.10 within a price band of

Rs.135 and Rs. 145. The issue size is Rs. 306.45 crores at the lower price band and at the

upper price band it is Rs. 329.15 crores. The offer comprises a fresh issue of 4,000,000 equity

shares by the issuer and an offer for sale of 18,670,447 equity shares by the India Private

Equity Fund (Mauritius) and Indocean Pizza Holding Limited which are looking to exit the

holding in Jubilant Foodworks. Post issue the holding of promoter will reduce to 62.19%

from the current holding of 66.36%.

Investment Concerns

- Increase in cost of raw-material prices can adversely affect the profitability.

- Competition from Pizza Hut, Mc Donald, KFC and emergence of local pizza outlets.

- Customer's tastes and preferences can change leading to fall in demand.

- Company has to be constant in the innovative mode in the menu to avoid the customer

fatigue.

- Increase in lease rentals is a cause of concern, which may dent margins going forward,

which is a negative for the business.

RECOMMENDATION

The company is available at a P/E multiple of 35.46x & 38.08x FY10E (H1 FY10E

annualized) at the lower and upper price band respectively on post issue capital, which looks

expensive as compared to some of its peers. The growth in the first half results of the current

years was exceptional when compared to last few years, which is a positive sign for the

company but sustainability of such growth remains to be seen in the coming quarters. The

company looks all set to grow in the next few years with a huge number of new stores

expected to open in next 2-3 years. However the current valuations look steep, though we

believe a good growth in the next few quarter may justify the valuations going forward

BIBLOGRAPHY

WEBSITES:

www. dominos .co.in

www. dominos pizza.be

www.biography.com

economictimes.indiatimes.com