More than £146million was wiped off Domino’s pizza chain’s value amid growing tensions between franchise workers and chief executive David Wild.
The boss denied he was at fault for its troubles which have seen three finance directors leave under his tenure. He insisted the firm has a ‘strong and stable’ leadership.
Wild runs the pizza chain’s UK and Ireland arm and has been struggling with souring relationships with those who run the group’s outlets.
More than £146million was wiped off Domino’s pizza chain’s value amid growing tensions between franchise workers and chief executive David Wild (pictured)
Some franchisees boycotted the annual rally this year amid complaints they are under pressure to open more outlets in existing locations.
This would benefit Domino’s but hurt those already in the area. It plans to open 60 in the UK this year, but is off target, with 22 opened in the first six months of its financial year.
Some of the most powerful franchisees have also set up the Domino’s Franchise Association UK & Ireland, similar to a group in the US that has given franchisees greater negotiating powers for a bigger slice of profits.
Domino’s is also seeking a new head of finance after Rachel Osborne quit in June with little explanation.
Some Domino’s franchisees boycotted the annual rally this year amid complaints they are under pressure to open more outlets in existing locations.
Experts question whether her departure was, in part, due to her remuneration – £584,000 in 2017 – compared to Wild’s £1.6million pay package. He has been described as ‘impossible to work for’ because of his ‘hard-man’ behaviour.
But he denied his management style was to blame for problems.’The reason the chief financial officers have left is because of Domino’s, it’s not because of me,’ he said.
‘It is a very demanding business and we need to make sure we get the right person next time. We have found it difficult to find a finance director who fits in with the culture. I’ve got plenty of colleagues, some of whom have worked for 20 years, who I have worked with at various businesses.’
City analysts have already raised concerns that internal troubles may hit investors if relations continue to sour.
Wayne Brown, an analyst at Liberum, said: ‘We appreciate relationships between franchiser and franchisees can go through difficult times but the boycotting of the rally and the formation of this association appear to be much more serious.
‘We question why this is happening now if things are as positive as the company has led us to believe?’
Profits dropped 9.7per cent to £41.7million in the 26 weeks to July 1 as Domino’s was hit by labour costs in Norway.
It paid £4million for restaurants there last year but is struggling to balance staff costs with demand.
Sales were boosted by its UK business as the World Cup nudged up demand, jumping 5.9per cent.
The group sold 8.2million pizzas during the tournament, with England’s semi-final against Croatia the busiest day, lifting sales 85.7per cent.
It said the timing on several new outlets was uncertain, raising fears that this could eat into profits. Shares fell 9.7per cent, or 30.8p, at 287.2p.