TIP839: Domino's Pizza (DPZ): Is the Royalty Engine Still Running? w/ Kyle Grieve & Shawn O’Malley
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You're listening to TIP. All right, folks, welcome to the investors podcast. Today on episode eight thirty-nine, we are digging into a business nearly everybody listening has probably ordered from, at least at some point in their life, or maybe their College days in particular. That's Domino's Pizza. It's the largest pizza company on earth with more than 22,000 stores and over 90 markets. And it runs one of the most capital light business models you'll find. 99% of its stores are owned by independent franchisees. Well, Domino's collecting a pretty healthy royalty on top of that, and so
That structure has helped the company compound its intrinsic value consistently for multiple decades now. And all this sounds pretty great. Until you look at some of the recent events. Revenue growth has kind of slowed to a bit of a crawl over the last four years. Same source sales are hovering near zero, and the stock has actually fallen 40% from its all-time highs. One of its biggest shareholders in Berkshire Hathaway, which once held roughly a 10% stake in the business, ended up selling out of the entire position at the beginning of 2026.
And on top of that, Donald's is carrying close to$5 billion in debt on a business that's now facing some pretty real questions about changing consumer health habits. But even with all that, the returns on capital have been fantastic and franchisees are still very much lining up to open new locations, both in the US and internationally. So The real question is whether this is a temporary rut for a great compounder or the new normal for a maturing pizza chain. Let's get into it. Since 2014, with more than 200 million downloads.
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