Domino's

Intangible assets and brand: The brand’s share of mind is reinforced by 6 percent national ad contributions and a digital ecosystem that generated more than 85 percent of U.S. retail sales in 2024, supporting consistent customer acquisition and frequency.

Score 90. Switching costs: End-customer switching costs are low in QSR pizza, though franchisee switching is constrained by contracts and embedded store systems.

Score 40. Network effects: Marketplace listings (Uber Eats and DoorDash) expand demand-side access while Domino’s keeps delivery in-house, creating a distribution-layer network effect without ceding last-mile control.

Score 60. Cost advantages: Centralized dough and ingredient procurement with U.S. supply chain centers, route density, and national media buying provide scale economies that smaller rivals cannot replicate.

Score 85. Efficient scale: Dense U.S. store network and strong franchisee unit economics deter new entrants at scale and compress local delivery times.

Global stores reached ~21,750 as of Sept. 7, 2025. Score 80. Weighted view: Heaviest weight on cost advantages and efficient scale yields a high moat score with acknowledgment that consumer switching remains easy.

Royalties are fixed at 5.5 percent of U.S. franchise sales and technology fees are per-transaction, which stabilizes corporate take-rate but caps discretionary pricing levers. Menu pricing must remain sharp versus value-focused peers, and the company leaned on promotions and stuffed crust innovation to drive 2025 comps.

Aggregator access can lift mix and reach but does not confer monopoly-like pricing. California’s fast-food wage floor at 20 dollars from April 1, 2024 also constrains store-level price flexibility. Overall, this is a value leader with selective pricing power rather than a premium pricer.

Revenue is anchored by recurring royalties on system sales and a large, diversified store base. Digital penetration is high, U.S. comps resumed growth in 2025, and aggregator distribution should moderate delivery cyclicality.

While international master-franchise health can create episodic volatility, the royalty model and balanced carryout-plus-delivery channels provide a predictable medium-term growth runway.

The securitized capital structure supports low-coupon, long-dated debt but leaves the company with roughly 4.8 billion dollars of long-term notes and modest unrestricted cash (~140 million dollars at Q3 2025).

Weighted average borrowing cost was 3.8 percent in 2025, and the company satisfied non-amortization tests; however, leverage near mid-4x EBITDA and scheduled maturities in 2027 through 2032 warrant caution if comps soften. Liquidity includes a 320 million dollar variable funding facility.

Free cash flow generation remains robust relative to interest.

Management prioritizes reinvestment in technology and supply chain, returns excess cash via rising dividends and sizable buybacks, and limits corporate store exposure. In 2025 YTD through Q3, buybacks totaled ~275 million dollars with 540 million dollars remaining authorized; the quarterly dividend was raised 15 percent to 1.74 dollars.

The decision to join aggregators while retaining self-delivery reflects pragmatic, high-ROI distribution investment rather than capital-heavy bets.

The leadership team mixes deep brand, marketing, technology, and franchise experience. CEO Russell Weiner and CFO Sandeep Reddy have steered a value-and-technology playbook that reignited comps and expanded distribution without ceding delivery control.

Strategic initiatives include a multi-year AI alliance with Microsoft focused on smart-store tools and personalized ordering, consistent with the brand’s digital moat. Board oversight includes an experienced executive chairman and independent directors from leading consumer and retail companies.