Domino's CEO Don Meij with pizzas at Domino's store. Pic Annette Dew
Domino's CEO Don Meij with pizzas at Domino's store. Pic Annette Dew

Franchisee sues Domino’s for $6.1m

A GOLD Coast Domino's franchisee is suing the company for $6.1 million alleging he has blown his dough due because of false and misleading conduct.

Tim Yervantian, the owner of two Domino's stores in Surfers Paradise, and his company PSI Pizza, allege in a statement of claim filed in the Federal Court that Domino's misrepresented the profitability of the Circle on Cavill store before him buying it in 2014 for close to $900,000.

He alleges Domino's stated the store would make $100,000 a week in sales.

GCB PICTURE: From left to right: Don Meij (CEO of DPE), Nick Knight (CEO of Dominos Australia and New Zealand), Tim Yervantian, Richard Allison (Current CEO/President Dominos Pizza International), J. Patrick Doyle (former CEO/President of Dominos Pizza International). Image was taken in Melbourne at the Dominos National Awards Ceremony held March 2014.
GCB PICTURE: From left to right: Don Meij (CEO of DPE), Nick Knight (CEO of Dominos Australia and New Zealand), Tim Yervantian, Richard Allison (Current CEO/President Dominos Pizza International), J. Patrick Doyle (former CEO/President of Dominos Pizza International). Image was taken in Melbourne at the Dominos National Awards Ceremony held March 2014.

However, Mr Yervantian said it actually never made more than $83,000 in a single week and that was just once during the height of the Schoolies festival last year.

Last week it made $34,000 in sales, he told the Bulletin yesterday.

"They day after I bought the store they went back to the tried and true strategy of selling cheap pizza," he said.

"The problem with the Cavill Ave store is it was not designed to sell mass, cheap pizza for $5.

"It was designed as a dine-in restaurant and to sell alcohol."

Domino's CEO Don Meij with pizzas at Domino's store. Pic Annette Dew
Domino's CEO Don Meij with pizzas at Domino's store. Pic Annette Dew

The statement alleges the Cavill store lost more than $600,000 in sales each year between 2014 and 2018 due to the $4.95 pizza offer.

He said the store was also in a poor condition when he bought it, especially so given it was meant to be a "flagship store".

He also alleges he was pressured into signing an agreement for a second store in the Surfers Paradise area for more than $650,000 after assurances it would be focused on pick-ups and not deliveries.

Domino’s office. Photo AAP/ Ric Frearson
Domino’s office. Photo AAP/ Ric Frearson

However, Mr Yervantian said the second store, which was opened underneath the Mantra Wings resort in 2016, ended up cannabilising sales from the first, and leaving him worse off.

"The second store has ended up delivering to customers from the original store," he said.

"Domino's Pizza Enterprises want more unit sales and locations and that motivates them to make commercial decisions that are in their interests rather than the interests of the franchises."

Mr Yervantian said he has not paid himself a salary in four years.

He said in the statement that he now suffers from anxiety and depression as well as increased stress levels due to the situation.

Domino's said in a statement that Mr Yervantian's allegations related to a commercial dispute between him and the company.

"The company has not been served with the formal legal proceedings......but is aware of the general nature of the claims," Domino's said.

"The company rejects those claims and will defend the proceedings."