Before you joined Domino’s, the company was not doing well. What was wrong?
In the Eighties, Domino’s was the fastest growing franchise business in America. We got to the point where we were growing so fast, that we probably overgrew in terms of what the company could manage. In the early Nineties, that growth started to slow down, and the actual performance of our stores was not all that great.
Then, [Domino's founder] Tom Monahan left the company for a couple of years and we started to lose focus on the delivery business. We were trying a lot of different things and were losing sight of our strengths. When Tom came back at the end of 1991, the company had $500 million in debt, we had something like 35 to 40 different banks, our sales had been negative for a couple years. The company was just a mess. We were having trouble meeting our operations and were struggling significantly.
That’s around the time you were named CFO. What was the hardest part for you in helping to turn the company around?
What was so hard was being in my early thirties and being put in a situation where we could have possibly gone into bankruptcy. I had to learn on the fly.
When I came on board, one of the major challenges I faced was communicating with our lenders. From day one I wanted very much to reach a deal with our banks by being as honest and open as possible. Lenders are smart people, so if there is a problem, you’ve got to be able to talk about it.
In 1994, we were able to refinance all our bank deals, and that was really the beginning of our turnaround. Once we were able to get out from under the banks we were able to focus a lot more on the operations, building sales and righting the ship. In August of 1993, when we introduced our thin crust pizza, our sales turned positive again.
Now that the company has been on an upward track for a number of years, what is your biggest challenge as CFO?
It’s very challenging for us to maintain and improve our margins in an environment where price increases are really not an option. It is just such a competitive market out there. A big part of that is process improvement. What can we do in our stores to reduce costs without compromising the quality of our service?
We are really taking a hard look at our priorities and focusing on our overhead, making sure that everything we do is value-added. We have consolidated a lot of our administrative and legal tasks internally. In our stores we continue to focus on improving our computer systems, which help’s us be more efficient. We really try to focus on pinpointing where there is waste in our stores. We also started an incentive plan last year, which included all administrative members of our organization. We have gotten employees to really do everything they possibly can to add to the bottom line.