Two Domino’s franchisees have united to purchase nine corporate stores and form the biggest franchisee group in the Australian pizza chain.
Queensland-based multi-unit franchisees Nathan Van Jole and Thomas Walker have acquired the Gold Coast company outlets under a joint venture model, splitting the stores between them and partnering with high-performing managers with the goal of developing the managers to be able to buy out their stores as franchisees.
Both Van Jole and Walker had been working independently on bringing on up-and-coming managers and used this experience to formulate the new structure.
Van Jole tells Inside Franchise Business, “I always had a passion for developing people, and in 2015 bought a franchisee out. There was a gun manager who had no cash, so we gifted her 49 per cent of the store, we provided the guarantee, and she had some skin in the game.
“The success of that store led to three stores and suddenly that system was developing people and creating other opportunities. We did it again with another young manager and he bought us out. It is such a rewarding model.”
Walker was also trialling a manager-into-franchisee development system and when the pair met at a Franchise Advisory Council in the Gold Coast they came up with the joint venture idea.
“Tom and I are the major partner, but all have an operating partner grown out of our own businesses.”
Walker, previously based in Bundaberg, has one partner with his share of six Gold Coast stores; Van Jole, who built up a strong portfolio in Townsville, has a partner with a share in the remaining three outlets.
Walker explained “We formed our own trusts – own 51 per cent each, our own partnership agreement, and shareholder agreements for minor partners. Throughout the expansion we shared the criteria with Domino’s and formulated extensive rules.
“We’re not just finding minor partners who will be working five to 10 years and then not have much,” said Walker. “We have put them on really fair deal with high store counts with the goal of making them millionaires over a 10 year period.”
Domino’s duo join forces
As the pair reshape their portfolios they take a practical approach to decision-making. Van Jole is currently calling the shots on a daily basis for the Gold Coast venture.
“We both have various things we are skilled in and each oversee certain aspects so there is no overlap,” he says. That might change when the pair bring in Walker’s Ipswich business to the group.
In the joint venture Walker and Van Jole have aimed to create a model that frees them up from 40-hours in store each week, and develops a sustainable growth plan.
Walker says “Our legacy is to bring in 20 business partners, we have seven currently. To get there, we need a 50 store group.”
That will be an achievement in itself, says Van Jole.
“We’re not so focused on store counts though, we may find some partners who want to go out on their own. We’ll do what’s right,” he said.
So how will this mega group affect the franchisee/franchisor relationship? The pair are confident it’s business as usual.
“This is not a power play,” says Van Jole. “We’ve spent our time on the synergies and benefits of scale, we’ve got all these new positions from that scale – internal admin roles, operations, compliance of our business, an internal trainer. Tom is looking at inhouse refurbishment. We’re looking at how can we use this to our advantage and function better.”
Walker says the support on hand from Domino’s has been excellent.
“Domino’s is the reason we wanted to expand. We trust it, the system gives us very good tools in operations land.”
The biggest challenge has been taking over eight stores in one day, Van Jole adds.
“What’s most important is how can we roll it out, start to operate and make changes without disrupting. We haven’t had much turnover, we’re hiring more people, we’ve promoted six staff to managers in four weeks. There’s certainly opportunity here.”