Franchise value
Domino’s is not in the business of selling pizza. It is in the business of selling franchises. People want to buy those franchise rights when they believe the profitability of doing so is strong.
There are instances of once hopeful operators claiming that subsequent sales, margins, earnings, and support, for stores, have been less than optimal, and certainly less than expected.
It is something we tend to keep in mind, when looking for secular growth stocks that are de-rating back towards something approximating a reasonable price (e.g. DMP returning from ~$160 to $100).
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Please note that past performance is not a reliable indicator of future performance.
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