Domino's receiver submits rescue plan
The receiver for the Israeli franchisee of Domino's Pizza, Roni Matari, yesterday asked the court to approve a plan to keep the chain running for three more months.
The plan has already been approved by Domino's management and Bank Hapoalim, which is the main creditor of the Israeli franchisee, Umani Brandname Foods.
Matari also asked the court to approve a NIS 1.8 million loan from Hapoalim to pay salaries for November and part of December, as well as a NIS 1.7 million credit line. The credit line is needed because Domino's customers usually pay by credit card, which means that the chain receives the money only a month later.
Based on the plan, Domino's sales will decline gradually while the receivership is in effect, and the chain will lose NIS 400,000 a month during the three-month period.
Nevertheless, Matari argued that it is essential to keep the chain in operation, because a temporary closure would hurt its reputation and cause customers to switch to other brands, making it harder to sell afterward. He said that Domino's reputation, along with its international brand name and strategic branch locations, are the chain's principal assets.
Matari added that he plans to try to sell the chain as quickly as possible, since he believes that it will become harder to get a good price as time passes.
Matari's plan is based on a recovery plan drafted by Domino's management in February. It includes closing three of the chain's 25 branches and downsizing its logistical center, while launching new products and offering special deals in an effort to maintain its customer base. In addition, Matari plans to invest some NIS 150,000 a month on advertising.