Domino’s Pizza Founder Sues Over Healthcare Mandate

Business owners face many obstacles in a changing world. Looming healthcare regulations in the U.S. have upset business owners and entrepreneurs on grounds of everything from cost to religious convictions. These challenges are par for the course and something all entrepreneurs must face. How you overcome obstacles will determine your success growing your business in the long run. Here are some of the many difficulties business owners must face and some advice on overcoming them.

Challenges & Change

Tilting at windmills. Domino’s founder Tom Monaghan, though no longer involved in the pizza chain he helped create, is suing the federal government because new healthcare regulations will force him to provide contraception coverage for employees of a Michigan office complex he owns, despite the fact that he says doing so is against his Catholic faith. Meanwhile, David Overton, CEO of the Cheesecake Factory and other entrepreneurs wonder about impact new healthcare legislation will have on their businesses. Huffington Post

Happy New Year. Healthcare law or not, every year brings new challenges to small business owners and entrepreneurs. The best way to handle them is to spend some time at the end of each year contemplating the changes that might be coming, says Glenn Muske, Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service. Make a habit of examining coming challenges and changes likely to impact your business at least once a year. Small Biz Survival

Rising Above It

Critical mass. No matter what line of business and regardless of changes in regulations or markets, all entrepreneurs face one common obstacle at one time or another. That obstacle is naysayers and critics more eager to tear down your brand than to give any relevant feedback. In fact, strategic marketing consultant Steve Miller is of the opinion that genuine feedback is in such short supply, he’s not certain he even believes in the phrase “constructive criticism” anymore. Ignore the critics and do what’s best for your business and your customers. Two Hat Marketing

Mutiny on the bounty. There are times it doesn’t pay to ignore what others think. This may be the case if bad morale is rampant among your employees. In fact, if your employees aren’t happy or doing their best, it may be your fault, says marketing specialist and copywriter Shannon Willoby. Fortunately, there are some simple steps you can take to turn your business culture around. The way your employees feel about you and your company makes a big difference in their productivity and ultimately in your success. It’s time to address it. Scott’s Local Business Corner

Time to go. Of course, the worst case scenario in the situation mentioned above occurs when employees become so fed up that they walk out the door. Bernd Geropp acknowledges there are times when your employees leave you for career improvement and better opportunities. At times like these, you should be happy for them and wish them well. Unfortunately, all too often, there are other motivations involved. High turnover at your business can cause considerable challenges. If there is a way to retain your people longer, you owe it to your company to examine it. More Leadership, Less Management

Lofty Goals

I can see for miles. Perhaps the best way to create a company culture designed to overcome obstacles is to adopt a company vision. A vision can bind your team together giving them a common goal and a clear path forward, says business adviser Brad Farris. Here are some broader benefits you and your business can derive from developing a clear and compelling vision. EnMast

Don’t be a copy cat. The digital revolution has brought about some unpredicted results. Digital technology has made it easier to duplicate and disseminate information than ever before in human history. Arguably, the best result of this revolutionary change has been the lowering of barriers for those seeking to publish content on many subjects at little or no cost, and the rise of the information entrepreneur. The worst result may be the cheapening of that content because of how easily it can be copied by others. This has given rise to another challenge, how to create unique value in a cookie cutter market. ClickNewz


Joshua Sophy Joshua Sophy is the Editor at Small Business Trends. A professional journalist with 20 years of experience in traditional media and online media, he attended Waynesburg University and is a member of the Society of Professional Journalists. He has held roles of reporter, editor and publisher, having founded his own local newspaper, the Pottsville Free Press.

5 Reactions
  1. Domino’s founder Tom Monaghan sold the company in 1998 and today has no active affiliation with our company. The media often neglect to note this fact. Domino’s Pizza has made no public statements about health care, as we are still waiting to see how the final rules will affect our network of small business owners. Domino’s is not a political company; it is not a religious company – we are a pizza company.

  2. Great roundup. I wonder how this lawsuit will go over.

  3. I don’t agree with Tom Monaghan’s religious views and he is contracting himself for being for free choice in one area and against it in some other field. That said, I defend his right to decided about his own business. I hope that ad hoc organizations like Americans for Free Choice in Medicine will be able to spread an antidote to the socialized medicine that is subscribed nowadays.

    It will be interesting to follow the lawsuit.

  4. Editor’s Note: We are allowing the following article to be included here in full as a service to readers, because it is a translation from the original French:

    Domino’s Pizza at War With Its Franchisees

    The relationship between the number one home delivered pizza company in France and a great number of its Restaurant Managers grouped in an Association remains tense, regardless of some recent signs of appeasement.

    The atmosphere is not always festive. In spite of an agreement reached at the end of November, the relationship remains more than tense between Domino’s Pizza (DPF), France’s number one take-away and home-delivered pizza company, and the Pepperoni association, which gathers together 180 of the country’s 203 franchise DPF restaurants. For ten months now, the franchisee and the franchisors have been at war, with the franchisors very much up in arms against the parent company to which they automatically pay over 40% of their turnover sales in the form of royalties and various fees. And in spite of a first few signs of appeasement, numerous disagreements remain between them.

    “We believe in our product, we believe in the brand. For my part, I have been linked to it for nearly 20 years! But it had become urgent to find solutions together with DPF… because otherwise we were heading straight for the wall!”. So says Kamel Boulhalid, the President of Pepperoni. For him, the most important Domino’s Pizza franchisee, with his 1163 salaried personnel in 40 restaurants (the French restaurants employ more than 3,600, with an average of approximately 18 persons per restaurant) “it was vital to find a new equitable and sustainable financial equilibrium between the franchisees and DPF. There must be a system in place whereby the franchisees have some chance to make a 3 to 4% margin. The Pepperoni Association will keep a watchful eye on the maintenance of some equilibrium between the franchisor and the franchisees.

    Others are less upbeat than Kamel Boulhalid. “It is high time for action. We must cease to feed that ogre DPF”, a rebellious franchisee calls out. “My circumstances are desperate. I will soon have to file for bankruptcy, or I will be bought out cheaply, like several before me. How much is my life worth? Will I attempt suicide, like those two other Franchise managers? Domino’s Pizza France only impoverishes its franchisees to eventually buy them out”, as another franchisee views it. As a matter of fact, in the last few months, DPF has indeed bought back collapsing franchise restaurants in Béziers, Castres, Fréjus, Issy-les-Moulineaux, Lens ou Liévin.

    But what is it that bonds these franchisees to the DPF “ogre”? It is a Franchise Agreement that le Nouvel Observateur has been able to consult. It stipulates (in eighteen clauses and over more than fifty pages) that all food components – called “the food” in DPF jargon – as well as all the equipment, must be purchased exclusively from DPF. “”Every aspect of the business is dictated to us: not only the food purchase and selling price, but also how to make pizza, how to dress, how to greet customers. Sometimes I feel as if I have joined a sect”, observes a disillusioned franchisee, smiling sadly. Yet another asks himself, “Am I so stupid as to believe that all will be well when the competition has disappeared?!”

    The competition has for years taken its grievances before the Courts, denouncing what could be viewed as Domino’s Pizza France’s “strategy”, namely to facilitate the indebtedness of the franchisees by permitting them not to pay what they owe to DPF as and when their bills fall due. This strategy allows for savings in the short and middle term for the DPF franchisees. But in actual fact it allows the eradication of the competition since the competitors cannot afford to sell at a loss, which in any case is illegal. On the other hand, in the long run, one outcome is the inextricable financial dependency on DPF of the franchisee. This dependency reaches such a level that it may translate in the franchisee being obliged to open a new restaurant … in exchange for some “debt forgiveness” and an undertaking on their part “not to engage in any litigation against DPF (…) as well as to refrain from denigrating the network or the brand”. A franchise manager so indebted for over 1 Million Euros exclaims: “At no time would I have imagined that my adversary would be DPF!”

    In April 2011, the General Directorate for Competition, Consumers and the Suppression of Frauds (Direction générale de la Concurrence, de la Consommation et de la Répression des Fraudes (“DGCCRF”)) duly established reports over the DPF network and issued a dozen fines for DPF’s “failures to respect the regulations in relation to billing”, as well as for “non-respect of the observation of payment times”. But the Stock Exchange price of DPF remains unaffected by these warnings and these actual practical defects. In fact, quite the contrary since the Stock Exchange price makes steady progress. “It feels like an injustice to be so ill-used by DPF which only aims to shine on the Stock Exchange when in the meantime they are literally leaving us for dead”, says virulently Gilles Bourbiguot, who heads the Domino’s Pizza franchises in Toulouse. This accomplished car sportsman is presently facing DPF in the Courts, before the 19th Chamber. He adds, “the DPF system is very effective even if it consists in manipulating prime franchisees into investing in an unprofitable model. But DPF in effect voids our contract with them by manipulating us into financial and stock-market transactions that are quite beyond us”. Just like Gilles Bourbiguot, half a dozen franchisees are now before the court, hoping that the 19th Chamber will validate and assert their rights.

    When interviewed by le Nouvel Observateur, Mélanie Farcot-Gigon, the President of Domino’s Pizza France, was emphatic: “the franchisees are what make the enterprise strong, we have many exchanges and we are real partners”. If we are to believe her, what her predecessor wrote in 2004 is still valid today: “(dear franchisees), we will accomplish what others have never achieved: we will be the best. In a few years time we will look back with a smile on our face”.

    Denis Boulard

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