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Domino’s CEO unveils booming profits amid scandal

Domino's Pizza boss Don Meij claimed more than $21 million in salary, benefits and shares in the 2016 financial year.

Domino's Pizza boss Don Meij claimed more than $21 million in salary, benefits and shares in the 2016 financial year. Photo: AAP

Amid a growing scandal, Domino’s CEO Don Meij has unveiled rising profits while promising the market his determination to catch franchisees breaking the law is “unrelenting”.

Domino’s Pizza Enterprises (ASX code: DMP) holds franchise rights in Australia, New Zealand, Belgium, France, The Netherlands, Japan and Germany.

Mr Meij reported on Wednesday that half-year (July to Dec 2016) revenue for Australia and New Zealand, the group’s leading region, grew 17.2 per cent to $150.1 million and that EBITDA (a measure that shows earnings before interest, tax, depreciation and amortisation is factored in) increased 23.9 per cent to $55.2 million.

It follows Fairfax Media’s reporting on allegations that Domino’s head office in Australia is squeezing local franchisees, some of whom may mistreat their workers to stay profitable — and allegedly even demand cash in exchange for visa sponsorship of migrant workers.

Mr Meij addressed these allegations indirectly, crediting a three-year investigation by his “proactive team” with uncovering misconduct by “some individuals”.

“I would prefer all of our franchisees lived up to our expected standards, and I am disappointed some individuals have tried to take advantage of our business and team members. But I am proud that our proactive team has uncovered this wrongdoing and corrected it,” he said in a statement.

“Our priority is to ensure team members receive their correct entitlements, and our efforts to prevent, identify and address any breaches of this expectation are unrelenting.”

Mr Meij said the group had conducted 456 spot checks at its stores over the past three years and undertaken 102 store audits, 42 of which were still ongoing.

He said only four franchisees had been “terminated” for deliberate underpayment as a result of this investigation.

And he noted that average EBITDA per franchise store had increased 31.7 per cent over the past two financial years. He used this to argue there is no pressure on franchisees to mistreat their workers.

“Our franchisee profitability figures clearly show there is no reason, nor excuse, for this behaviour. The findings from our compliance program demonstrate no correlation between store profitability and underpayment of wages.”

A Domino’s spokesman told The New Daily the average yearly profit of the four franchises allegedly underpaying their workers was $94,500.

The New Daily
reported this week on the case of Tosif Varsi, a former store manager who was underpaid by Domino’s and who alleged he was “lured” with promises of visa sponsorship to work 50, 60 and even 70 hour weeks without additional pay.

Mr Tosif was employed by a franchisee company of which Mr Meij is a director. Mr Tosif was also a former employee of a franchise “terminated” by head office for alleged underpayment; he denies the former franchise, held by his friend, was doing anything wrong.

Domino’s says Tosif’s friend admitted to underpayment but then subsequently denied it.

Both Domino’s head office and the franchisee, Ryan de Vink, admitted to mistakenly underpaying Mr Tosif.

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