Domino's has a value range priced at $5 a pizza. Some background on Domino's and their $5 pizza . Apart from owning some of the stores, and receiving royalties from franchisees, a significant portion of Domino's profits come from selling dough and toppings to its franchisees (who are required to buy from the parent company) Franchisees pay Domino's a royalty fee of 7% of sales. They also pay Domino's 6% of sales for national advertising campaigns. In 2014, Domino's introduced its $5 pizza range in In late 2019, Domino's took 5 pizzas off the menu, only to reinstate it soon after following a drop in sales growth (to the lowest in about 6 years) In early 2020, some of its franchisees are suing Domino's over its ss pizza - claiming that it had caused a significant drop in store profitability. Australia. What are some of the fixed and variable costs of selling a pizza for a Domino's franchisee? b. For workers who are paid on a per hour basis, is this portion of the labour costs really a variable cost? Is the estimated contribution margin of a S5 pizza likely to be positive for a franchisee? Would the S5 cover the full costs of the pizza? Note: Domino's pizza food (ingredient) cost is typically 30% of the pizza's selling price What are some of the possible reasons behind Domino's decision to cut prices of (some of) its pizzas to $5 back in 2014? 8 9 board Calendar To Do Notifications Inbox