Perth franchisee Fred White is taking Domino's and its CEO Don Meij to court. Picture: Facebook/Don Meij
Perth franchisee Fred White is taking Domino's and its CEO Don Meij to court. Picture: Facebook/Don Meij

Aussie’s $3 million Domino’s battle

PERTH man Fred White was one of Domino's star franchisees just a few years ago.

But today the relationship has well and truly soured - and it's largely thanks to the pizza giant's popular $4.95 range.

Domino's introduced the cheap pizzas back in 2014 when it announced it was slashing the cost of its value range pizzas to just $4.95, which became a hit with penny-pinching customers.

However, many franchisees - including Mr White - claimed the strategy ate away at their profits.

In December, Mr White, who had three Domino's stores in the Western Australian capital, filed a statement of claim in the Federal Court seeking $3 million in damages from Domino's and it's rich-lister boss Don Meij.

In 2018, Mr Meij was revealed as the country's highest paid CEO after he took home a whopping $36.84 million the previous year.

The news sparked anger across the country at the time, with then-PM Malcolm Turnbull even weighing in, telling 3AW Mr Meij's salary "seems a hell of a lot".

Domino's CEO Don Meij was Australia’s highest-paid CEO in 2018. Picture: Annette Dew
Domino's CEO Don Meij was Australia’s highest-paid CEO in 2018. Picture: Annette Dew

THE CLAIM

Mr White became the franchisee of a Domino's store in Balcatta in 1998 before taking on a Mirrabooka store in 2011 and a Tuart Hill store in 2016.

Citing the legal documents, the Courier Mail reports Mr White launched his case against Domino's Pizza Enterprises Pty Ltd (DPE) and Mr Meij after alleging the profits at all three stores dropped after the company did not inform him of the $5 pizza plan.

He also alleged he was coerced into buying ingredients at "unreasonably high" prices that were marked up by 18 per cent and that DPE misrepresented expected sales.

Mr White alleged he sold his Tuart Hill store last September for $161,000 less than it would have been worth had the figures been correct, the value of the Balcatta store plummeted by $319,368 as a result of DPE's actions and the $5 offer caused a loss of profits for the Balcatta and Mirrabooka outlets.

According to the Sydney Morning Herald, Mr White also took aim at the chain's "fortressing" strategy, which involves Domino's reconfiguring delivery boundaries to make room for a new store when there is already an existing one in the same area.

RELATIONSHIP SOURS

While Mr White and Mr Meij are locked in a legal battle today, it was a different story in April 2015 when Mr Meij praised his successful Domino's career in a Facebook post.

"#TBT Fred White has had a very interesting career, starting in the fast food industry in 1979," the post reads.

"In the early 1980s he joined Silvio's and helped develop it from a couple of stores into an incredibly successful pizza chain. After three years Fred migrated to Perth and worked with our now Chairman Jack Cowin. Silvio's bought Domino's in the early 1990s and in 1992 Domino's came to Perth, and Fred starting working with us again.

"Fred went on to represent Australia overseas and spend time with Domino's founder Tom Monaghan. He also went on to be named Domino's South Pacific Manager of the Year and third runner up Manager of the Year for Domino's across the entire world.

"He holds an accounting degree and spends his free time breeding racing thoroughbreds and mentoring young Domino's Franchisees. Fred has been amazing to work with over the past 30 years and his knowledge and experience are a huge asset to our company."

Fred White had been a Domino's franchisee since 1998. Picture: Facebook/Don Meij
Fred White had been a Domino's franchisee since 1998. Picture: Facebook/Don Meij

DOMINO'S RESPONDS

In a statement to the ASX earlier this week and provided to news.com.au, Domino's acknowledged the litigation and confirmed it expected to "be served shortly with Federal Court proceedings by an Australian franchisee".

It also highlighted the company's "efforts to improve the standards of our franchisee network" via a program that started two years ago.

"We have shared that these efforts would likely lead to some franchisees being unhappy with DPE and choosing to leave the network," the statement reads.

"We also flagged some of those franchisees may choose, as an attempt to achieve leverage to bargain with us, to take legal action or to raise the threat of litigation through the media.

"This is one such case in our view. Therefore, we are disappointed, but not surprised, by this action by an Australian franchisee which we do not consider represents the relationship with our wider franchisee community."

DPE said the matter related to a "commercial dispute" between DPE and the franchisee that "has been the subject of discussions with the franchisee for some time".

The statement also said DPE "rejects those claims" made by Mr White, arguing he had been in the business for more than 20 years, had been a successful Domino's franchisee in that time and recently sold one of its stores on commercial terms to another franchisee.

"While DPE is disappointed that the franchisee has chosen this path of litigation, from the information available to it, DPE considers the franchisee's claims to be without merit, and in fairness to our investors and franchisee network, it is important that we defend the claims," the statement continues.

"The claims are not expected to be financially material to DPE."

Mr White is being represented by Peter Snelgar of CJM Lawyers. News.com.au contacted CJM Lawyers for comment.



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