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Papa John's founder trashed competitor Domino's adoption of technology. But is he wrong?
First, journalist David A. Mann of Louisville Business First reports that Papa John's CEO John Schnatter does not like the idea of Domino's rolling out 100 Domino's DXP vehicles (see photo) that are equipped with an on-board oven to keep them warm. The more top-down franchisor commented:
"The car will dry that pizza out," Schnatter said yesterday while speaking to a group of students during an event at the University of Louisville College of Business. "I think their PR work is brilliant, frankly. The things they're doing with technology — they don't particularly work, but people seem to like it." Schnatter said Papa John's doesn't want its drivers out on long runs with multiple orders that would require an oven. "I'm just going to stick with the Camaro," he said.
To which reporter Brian Sozzi of The Street wonders outloud if Papa John's founder is clueless. Although the Louisville franchisor was the first to launch online ordering in 2001, unfortunately, as of late technology has been giving the edge to Domino's, a franchise system known for its intermingling of employees becoming franchisees and input up to the brand's headquarters from its strong independent franchisee association, which not only autonomously channel the insights from its Main Street pizza business owners but also give the brand bottom-up directives from time to time:
Judging by the numbers, Domino's technology sure seems to work pretty well.
The company reported domestic same-store sales surged 10.7% year over year in the fourth quarter. For the year, Domino's cooked up a 12% same-store sales gain in the U.S. Meantime, Papa John's saw its system-wide sales in North America rise a paltry 1.9% in the fourth quarter. The result badly lagged Domino's, and marked a slowdown from the 4.2% growth rate (also much slower than Domino's) delivered for the entire year.
Shares of Domino's have gained about 40% in the past year compared to a 6.1% drop for Papa John's.
Domino's impressive year of sales in 2015 come as the company has made a big push digitally in an effort to make it easier for folks to order pizza. For example, the company debuted a capability that allows people to order pizza via Twitter last year, and more recently introduced an app that will place an order with one touch.
In September, the company launched its first rewards program -- for every order of $10 or more, a user snags 10 points. After amassing 60 points, customers can get a free, medium two-topping pizza.
"We have spent a lot of time trying to grow digital penetration in the U.S.," Domino's president and CEO Patrick Doyle told TheStreet in a Feb. 25 interview.
Here is a video of Domino's new car.