GROWTH OF FAST FOOD CHAINS IN INDIA

KFC, Pizza Hut and Dominos 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 wouldnt make sense if we positioned ourselves merely as a convenience, delivery brand, explains Ajay Kaul, MD, Dominos India. Taking a cue from McDonalds 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 Dominos 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 McDonalds, Yum! (which owns the KFC and Pizza Hut brands), and Dominos 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 ones 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 Dominos Pizza, Inc..

The 200th Dominos Pizza store opens.

Dominos 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 companys 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 Dominos Pizza Belgium is transferred to master franchisor Dominos 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 companys outlets to the Domino's format and brand.

Dominos Pizza buys the Pizza Company chain.

Dominos 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

DOMINOS PIZZA INDIA

When Dominos 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 countrys burgeoning middle class, but also the brand omnipresent. In an interview with Amit Sharma, Dominos Pizza India VP, marketing, Dev Amritesh, shares the brands India journey and the companys plans for India. Excerpts:

From being a foreign snack to being a meal option, how has Dominos 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, Dominos 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 Dominos stand in India and what is the strategy to take it to the next level?

Dominos 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. Its 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.

DOMINOS PIZZA VISION

The dominos 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 Dominos 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 laymans 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 candidates end. Its 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 Dominos 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

Dominos 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. 2. 3. 4. 5. 6. Grab the correct portion from the make line bin Evenly spread the topping over the pizza Use both hand so you can go more quickly Check quality of the item Place items on the belt outside the oven Try to take the correct portion of cheese from the bin in one or two grab 7. 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 dont 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 transaction payment

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
Dominos 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 Dominos human resource leaders.

During the program you will work in a series of rotational assignments. Well 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 Dominos 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. Well 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 Asias Best Employer Brand Awards - 2010 by World HRD Congress. Mr. Basab Bordoloi won "Most Powerful HR Professional of India" award in Asias Best Employer Brand Awards - 2010 by World HRD Congress. Jubilant FoodWorks Ltd won the award for Continuous Innovation in HR Strategy at work in Asias Best Employer Brand Award - 2010 by World HRD Congress. Ranked 9th Best Employer 2009 in India in Hewitts 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 Hewitts Best Employers survey 2009. Best employer in Retail and 3rd best employer in Services category in India - Hewitts 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-MERCERs "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. Well 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 uswere 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 Dominos. Its clear to me that many of the Pipeliners will reach the highest levels in management at Dominos.

IN STORE TRAINING IN DOMINOS

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 Dominos 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.

Dominos 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.dominospizza.be www.biography.com economictimes.indiatimes.com