Pizza franchisee struggling in Israel - records loss for third year
By Rotem Starkman
April 03, 2003
Omni Food Brands, the owner of the Domino's Pizza franchise in
Israel, yesterday reported a NIS 7 million loss in 2002. This comes
on the heels of a NIS 2.3 million loss in 2001 and a NIS 7.2 million
loss in 2000.
Domino's Pizza is one of several international fast food franchises
that have struggled in Israel, including Burger King, Kentucky Fried
Chicken, Dunkin' Donuts, Pizza Hut, Haagen Dazs, Subway and Starbucks.
Omni Food Brands, controlled by Ian Fisher (23 percent), the Almog
family (23 percent) and a foreign firm named Mar Yad (43 percent),
operates 19 Domino's Pizza branches in Israel and has a subsidiary
role in seven others.
The company is initiating a number of efficiency measures to cut
expenses and plans to sell off some of its assets. Earlier attempts
to boost finances included a NIS 5.5 million injection of funds
by the owners in 2000-2001. Some of this was later converted into
In 2002, and again at the beginning of 2003, the shareholders provided
another NIS 2 million. To attain expanded bank credit, the owners
have also committed to providing addition funds if necessary.
One of the reasons for the lack of success of Domino's Pizza and
Pizza Hut is the competition between them that demands high advertisement
costs and special discount offers. Local pizza ventures, on the
other hand, have lower operating costs.
Entering the pizza market in Israel is relatively easy compared
to the hamburger business, for example. Equipment is relatively
simple and inexpensive, and large storefronts are not required.
Regulatory and kashrut approvals are also relatively easy to attain.
All this makes it easy for local "mom and pop" pizza operations
to compete with the likes of Domino's and Pizza Hut.