Domino's Pizza Enterprises Limited (DMP) Earnings Call Transcript & Summary

I am very excited to be able to become the CEO of Taiwan. So it's a great opportunity for me. It will help me grow again into a new role, into a new vision and also working on a different level with people. So how can we build the team, how can we build the sales how can we grow -- how can we grow more stores. So yes, I'm very exciting to get this role, and I cannot wait to start and to be in that market. If you look at each step of my career and dominance basically started before Domino's because we did have our own pizza company called Pizza team. Our stores that we had become Domino's, my partner, I separated it -- so we each had our own market. I started off buying basically this store over here in Leiden. It was on another site situated back then. We move to this side because this is in the middle of the historical center of Leiden, more people walking by. From that part, I was also doing trying to make my stores look nicer than the actual stores they look like. And unlike Wolde asked me 10 years ago to join the head office, so to become the one that would set up the development department, getting bigger, the role change. So the design part of the stores, how do the stores look like. was becoming more and more something from me. Basically, in the first when I started, we got some pictures out of Australia, [indiscernible] and the Netherlands. I always try to do it better. I always want to win. I always want to make the best stores possible. And I cannot handle it when somebody is building something nicer than I do. So I always try to be the best. It is something that when I had my stores, and we work with 5,300 people already on a daily basis, the personal contact is very important. So what I really would like to know what's in your mind? And how can I help you getting better in the things that you're doing. And if that works, then you will see automatically that people will be motivated and will be staying motivated. So that is so important to have that personal context. I'm a people person. So a people manager. I do like people. And really, I like to give people the trust and I really want to get people in to believe in themselves. I always try to get to the point that people will do things what they never thought that they could do. So I try to grow them. I try to grow the teams I think that is one of the biggest strengths that I have given confidence to people, let them make mistakes. So I really hope that the people will make decisions and we -- not all decisions are right even for everybody, for me, I have made mistakes that has cost me a lot of money. But you cannot grow without making mistakes. And if people recognize that, and they are not afraid of making mistakes, then they will grow. And that is basically the part that I really want to see how we can execute that in Taiwan. And also, again, back to -- I am a winner. I want to win. I want to be the best. I want to grow the Taiwan market, and I want to show off to the world that Taiwan would be or will be an outperforming market for Domino's. So we need to grow the sales and be better than our competitors. And that is what I see in the Taiwan market, where we have a big opportunity to grow because there are a lot of people in there, and that is basically going back again to the Dutch situation from back then is that we didn't believe it. And if I can bring that over to all the people in there, it's -- come on guys, we will be big. We will have 500 stores, 700 stores, 1,000 stores, it is the belief that you need to get into the system and into the people, into the franchisees that they can grow. Everything is also with having sales. So it's so important that we will grow the sales. We have a fantastic colleagues helping us out with those kind of things. So the marketing department, the IT department, basically everybody, it is -- as mentioned, it is that puzzle, every piece must fit. And I think we can have it fit, and we will make it fit. Good memories are work hard, but also celebrate the wins, having the parties. So that is really great. I always love to go to the stores on the Sunday night when we broke records. That is always memorable. And also, the things that really make you proud is if you have people working for you that become managers of the year in Netherlands, European manager of the years, so that people grow themselves and also that people are becoming franchisees. So I started off with a franchisee as a partner -- or a partner that was, I think he was 18 or 19 years old. That is what is making you proud to give the opportunity to people to start a career in something what they even didn't know that it was possible. And also when they started off as a driver or as a pizza maker into the stores, that they can have their own store or basically that they can have more stores and become even a CEO. That is and that are the memorable things that a lot within this company.

Well, welcome, everybody. It's a pleasure to be here for me. Even it's a really, really important week because I haven't been here in over 2.5 years, it's just incredible how quickly times flow, and we have been [indiscernible] into the market for obvious reasons. I think we've added something like 300 stores because I think the last time I was here, we opened the 600th store. And Japan has gone on to just write more and more of the fastest stores in the world week after week despite the fact that it's been growing despite the fact of COVID, there's some extraordinary things. So it's going to be great during stores, catching up with our franchisees and eating some of the new products that we haven't got to eat in the most recent years. As on -- you saw a profile of Ronald, and it's good that we've got that as a bit of a reference because Ronald is the perfect example of the whole path to excellence in this business. And whilst I'll start at the introduction, it's really about the management that are delivering. And I couldn't be more proud with the tenure that we are able to achieve in this business. And there's just no way that we could have got anywhere near the results we did throughout COVID, the way we're dealing with inflation right now, if we just didn't have so much experience in the field, so much depth. Not that we've dealt with all of us as much as it might have been around 30, 34, none of us have dealt with some of these tees. None of us are done with the pandemic. Of course, none of us have dealt with this sort of inflation, but still founded in certain ways that we think helps ground us to make the decisions that we make. So one of the things that you would have seen us refer to in previous presentations is that we're really grounded in our purpose. Why do we exist? Why -- if we're taking on a country like Taiwan, one of the first questions you say, why? Why should Domino's be successful in Taiwan? Why should Domino's be successful in Japan? Some of these markets like the Netherlands and Japan and Taiwan, they're not originally pizza eating markets. Pizza hasn't been a natural cuisine, and yet we've seen such extraordinary growth. And so on one end, we look at it and we say that in a so connected world, the world is really, really connected with the amount of social media, with the amount of technology, always boring into those little screens within our reach, but actually, when you study, more people feel isolated than ever before. And this was leading into the pandemic and the pandemic made it worse. Because my life always feels envious of somebody else's life the way they're parting on TikTok, the way they're having these real reels, the way that they've got their Instagram life and my life is lacking because I don't do these things enough and it kind of actually creates a lot of anxiety and depression, especially among young people. And so people innately, they're hardwired to want to have connection and they want to belong. And on the other side, and of course, pizza is the world's one of the most bonding foods, right, because you share pizza. We always -- when we were young, we sort of say a burgers loser food, right, because you have it on your own. You're holding your hand you a burgers. It's one-off thing you eating fries. Whereas pizza has always brought people together, whether it's [indiscernible], whether it's family, there's whole studies where there's video cameras inside homes, what happens when the pizza arrives and whatever, look, first time we've seen your 14-year-old daughter in a month that she actually does exist and will come down and eat. So it is almost biblical to some degree that is breaking bread around the table. It's also born in universities where you don't have cutlery. The packaging is fully recyclable. So you can't put it in a recycle bin and it's all done. You don't have to do a big cleanup and everything else, right? It's also a versatile in that way. And at our best, we seem to break that paradigm and we really strive to with our value model -- and I'm sorry, no any slowdown for translation. We really do break paradigms that a lot of people say that it can't be fast and high quality. It can't be low price and quality. It can't be fast and so you can keep doing these things around the circle, but when we nail it, we get all 3 of them, and that's what we call crushing convention. So that's our purpose. Our pizza brings people closer and you would have seen even on social media that we launched a truck last week, 1 of 7 that are in production, where we drive our stores out into the community to get closer to communities, which we can't access with stores and so on. And so knowing who we are has really helped us the last 3 years. And surrounding our purpose are our 5 values, which we see as floating moons around the purpose. And you would have read many these, I won't go all through them. But one of them that, for example, is really relevant in a time like this when we're making decisions that helps us. When you see inflation, a lot of people think that there's winners and losers in inflation, right, that if we're losing somebody else is winning and so forth. But what really grounds us about trying to help people prosper is that we say, look, how -- and I was saying to one of you just earlier about for a CEO and it's a spinning plates to say, how do we make sure that everybody gets a chance to get the balance out of this, that our team members are well renumerated, our franchisees are profitable coming to the other side, that our communities that we're investing back in our communities with sustainable activity. It grounds us. It was a really famous investor, many of you know without mentioning the brand, who came out last week and said -- or last month and said, "We're going to give companies a buy for 1 or 2 years because of inflation, and they don't have to -- we won't mark them down for sustainability." We don't agree with that. We would argue that the world is not getting any cooler, so you can't stop. You've got to keep going on these programs, right? You don't just choose your morals at a time when it suits you. Instead, when you're faced with some of the things during the pandemic, when you're faced with some of the war in Ukraine and so on, is how do you keep making sure that you don't make one decision at the expense of another part? How do you try to balance these things through? Ultimately, if the customer is winning that will flow into our unit economics, our franchisees will win. If we're continuing to invest in our sustainability, our community is a win and our community activity, franchisees that are more successful are more willing and wanting to invest in their communities. And of course, people want to invest in us because it leads to exponential growth as we've seen it today. So just one of our values to make sure we remind ourselves constantly, what's this balance here, not winners and losers as a company. So what is the foundation of our growth? The earliest model, and it still exists with us today is what we call having a high-volume mentality. At a moment of choice, you can either save yourself to success we can grow yourself to success. And we choose to grow. It can sound contradictory. We still obviously need to be efficient. There's moments like this that you do evaluate -- is there things that we were doing the last 2 or 3 years that don't belong in the future because they're dragging us down. And I'll point to some of that with delivery and how I can define that. Because growth still means efficient growth. All inefficiencies get passed back to the customer. It's as simple as that. I was with a franchisee last week when we're opening the truck, launching the truck, and he's talking to me about an area that is still is doing $50,000 in sales has been a [indiscernible] of growth. But he said, "Don, most of my growth come from these 2,000 homes. I'm getting $10,000 of sales, but it cost me $16 to deliver there." And I was sitting with this particular franchisee Greg is a or franchisee in South is Greens and I said, "Gee, you've got to cut it off. because but I can't, it's $10,000 in sales. I said, Greg, every -- one of those orders is a loss and all of your close customers are paying the price. It's inefficient to continue to think that can exist. And I know I'm sitting there as a partner because, of course, we lose food margin and royalties when we cut that off, but that's a short-term. The longer term is that original store will get back up to 50 and far more profitably because it's subeconomic in today's world to be delivering at $16 worth of labor just because the sales are there. It doesn't make sense. And in fact, the homes closest to your store are being penalized because it because these drivers are driving too far away and often they should be closer to the store. So high-volume mentality is what grounds us. It's how we constantly think for solutions. At the center, if you remove all the mental and physical bottlenecks in business, sales and profits are exponential. And mental and physical bottlenecks come at you like a speeding bullet when you get large external influencers like the pandemic. When you get large external influences like Ukraine war, energy costs and food shortage and so on. So when these things come at you, they can be -- very quickly, you can freeze with your mental -- and so -- it's often no matter how well you are trained and how well you're inspired in this culture, it takes a lot of leadership to keep asking the question back by dropping those 10,000 homes off, which is an [indiscernible]. It's so much in our business to grow, and you're telling me I'm going to drop 20% of my sales off, and you go, yes, yes, you do because that's the right long-term strategy, that's more sustainable. This isn't creating a win-win circle because what you're going to do -- what you're basically asking is, how do I put my price up to match that. And the -- with an average delivery cost of $9, adding $7 -- it's just that the prices just don't add up. It just doesn't work. So here are some of the key metrics as of the last financial year, as you know them. So I think you're very, very familiar with these. And what I'm really proud of is what we've been able to do despite many of the challenges that we've all had to deal with around the world. But we really materially grew this business. And one of the ones that, if we went back just 4 years ago, aggregators are going to eat our lunch, that we had it all to ourselves and now it was all going to go away because there was an in new entrance. And what we want to be able to illustrate to you today, now actually, that's one of the biggest tailwinds in the history of our company, in fact, that the pie is getting so much bigger. And we won't wake up with the same share of digital delivery that we started with 8 years ago when we were 80%, 90% of the market. But you don't need to because the market is just so much bigger, and I'll point to that as we go through. Obviously, we've added at least one acquisition, and hopefully, we will do more in the near future. And we've been able to grow our sales and earnings accordingly. So many of you heard, when I grew up in this business, I said 2 [ envies ] going to the worldwide rally, which we went to 3 weeks ago in the U.S. that we'd rock up and [indiscernible] little Australia happen to be in a really bad currency slump, and the U.S. measures everything in U.S. dollars. So you feel like a loser, right? And you come back 2 years from now and now on a currency [indiscernible], but that was really frustrating because they had nothing to do with your performance. It was an external influence. The other thing -- so currency used to drive me crazy and the second thing was there's just not enough mouths and stomachs in Australia. Well, we dealt with that. We now have no excuses. We service over 365 million people. When you add those 10 markets together, bigger GDP than China and larger populations in the U.S. So I have a private bet with the biggest franchisees in the U.S. that I sat with them 5 years ago. I won't tell you what that bet is, but there's a certain number of stores and who gets there first, the U.S. or DPE. And we're starting from, as you can easily look at their still count to where we are, but we're growing faster. So we're on a tier for that.

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Actually, it was to try. I'm a shareholder in DPZ. I was going to win either way. I was trying to unlock their mindset. So by setting off the challenge that genuinely, if they hit that, my share price in the U.S. will well and truly pay for my large bets. But -- so my motivation was very different at the time. I was sitting in a room of franchises like there's all go in the U.S. is done. And you got to be kidding me. And it was been setting the challenge and so on. But yes, I do still think that we will beat them because I still think that there's conservatism inside that network that we don't exactly share. So -- but I hope we both win because I can't lose them as a shareholder. If I have a look, from a store growth point of view, we continue to show, if you have a look from a percentage that we continue to grow this network, and it has been more challenging in the last 12 months. There's shortage of materials, staff, inflationary costs, it has been more challenging. But for those who have faith, you're going to see a lot of stores open this month. Unfortunately, it's always June and December, and you're going to see that we're hitting our targets organically of 9% to 12%. And so we're still quite confident in those sort of things. I'm not here to give any guidance or whatever, but I'm just more talking to our 9% to 12% outlook. So I need to be clear on that. I'm not here giving any updates and stuff like that, more that we have faith in our model. And you can see that, that store count -- even sometimes when you're in a month at all, you don't sell the roses. You feel like, okay, we're running hard at this one, we're running hard at this challenge that's in front of us, but it is sometimes nice to sit in front of you as shareholders and reflect on how much we've taken the Domino's business to scale around the world. And excitingly so, how small we still are relative in many of the markets that we own. You can't say that about Australia, New Zealand, although we still have another 300 stores to open there. But you can say that as synergy step outside Australia to see the scale and size of what's in front of us. So when we look at the long term, what gets us so excited is that this is an outlook. These are milestones. If new investors sometimes look at these outlooks and they do a discounted cash flow out to that number and think that's the end. In places like Australia and New Zealand, the 1,200 stores in there could be pretty close to the end because it is going to get quite saturated at about that number. But when we look at Taiwan, when we look at Japan, when we look at Germany or France or Belgium, Denmark, the numbers we put on the table, they're typically a milestone. And history will show if you go back through the business that we have upgraded milestones. It's never a guarantee because the models don't show the future numbers until you get closer to those numbers. Looking how quickly Japan rallied to look at 2,000 stores, but yet it wasn't that long ago it had a milestone of 600 stores. But at new tipping points, with new penetration, the model just spits out more stores. But then we do see places like Australia where it doesn't seem to get a lot bigger. So you go, that looks like it's probably about 1,200 stores without something else changing in the market. And of course, Europe probably has the longest legs based on how much pizza consumption specifically in Germany and France. And those milestones a way underpenetrated relative to the other milestones that have been given on like businesses. So when we look at our medium-term outlook, once again, these are not guidances. These are outlooks. We do think we can grow our organic network at -- somewhere around that 9% to 12%. So that's still something that we believe it is harder than it was 2 years ago, 3 years ago. But there is the size and scale in our business that gives us that view that we can deliver on that. So how do we deliver? Well, it hasn't changed. I address the whole international Domino's way outside our business a few weeks ago. And it's really interesting. That 62-year-old brand that the founder, Tom Monahan, gave us the road map and the road maps never been more true than it is right now. And that he pioneered home delivered pizza. High-volume mentality is an extreme version of what he called handle a rush. Because, for Mr. Monahan, who's still alive, and we still meet with him and talk to them about our business plans, he's always very excited. If anybody ever walked up to Mr. Monahan and said to him, "What's the secret to growing this business? He'd have a very, very simple statement, "handle the rush". Now to somebody outside, what does that mean? Well, basically, the rush is the busy period. And most businesses cap themselves out because someone goes, well, when do you lose control of the ovens or you don't have enough oven power, enough drivers or capacity? And someone would say, for 2 hours on Friday and Saturday night, only for 2 hours on Friday and Saturday night. But if you put a cap on that, you put a cap on Monday. The best grade will go Monday is grow Friday because rising tide lifts all boats of how the business grows. And so famously, many, many years ago, Mr. Monahan visited my Morefield store, which was already the second busiest store in the world for Domino's when I was a franchisee. And he walked into my store. And in those days, Domino's store didn't have any more than 2 ovens. And I said this morning, would you put a third oven, no one does that? Or would you split this store? The store only has 6,800 addresses, which was crazy low. And he just looked at me and he said, "I don't know Dom, you got to do something." In other words, you've got a mental barrier right now. Whether you put the third oven or put the store in, the status quo is frozen and you're now starting to -- the business start to suffocate. And as history had I put a third oven in its split that store. And today, there's about $150,000 done out of that area in the [indiscernible] area. So what powered us when we listed the business in 2005 is that people's lifestyles haven't -- if anything, it's got more challenging of how do you turn yourself off in this hybrid work. And we believe we live in the age of delivery and the growth numbers continue to show that. You can see here that our CAGR and digital growth has been roughly just under 27%. Last financial year, we did just under $3 billion in digital. And it's still the fastest growth part of our business. Digital delivery is what is the engine. And it's what -- when we talk about our pizza brings people closer, we really think about that through the primary lens first in delivery and the secondary lens in carryout. The carryout market is huge, but it's a shrinking market. The delivery market is huge, and it's getting way bigger. And so sometimes what I have to challenge our team with is they may see because of the pandemic, a negative result in pickup and a positive result in delivery and they're saying my issue is pick up. And the answer may not be that. The answer maybe you'd just maybe not growing the delivery even as fast as it could because you're seeing it as positive and you're distracting yourself back into the pickup market, but the pickup market is shrinking. It probably should show a negative number, although -- of course, we're hungry and we want to make it positive. But the real, real engine room here is delivery. And look at the scale, I mean, when we -- at one point, we were, what was it, 80%, 90% of the -- this is just the EU numbers, by the way. That's just one example. And oh my gosh, we were such a big part of the whole digital market. I've got the numbers here, 90%. In 2016, we were 90% of the digital market, and today, we're less than 1/3. But it's so much bigger. And so we're so small in QSR actually, and if that's the fastest growth part of the business, and that's what we're born to do, then it's still a huge tailwind for us to execute against. It doesn't mean it's just given to us, but it's -- like many of our competitors are waking up now forced to be in the delivery business, they really are conflicted in many ways. Their packaging isn't designed to be delivered. They're using third parties to deliver rather than their own fleets. Their cost structures weren't designed. They have much larger capital platforms, whereas every single thing that we do at DPE is designed to be delivered. And in fact, the only product we sell that is isn't ours is Coke or Pepsi. Everything else, we think about it through the prism of that extra 1% of efficiency. And when you look at the predictions of where the market is going for our markets in APAC and Europe. And you can see where we were back in 2007, and these are obviously predictions as by quoted on the bottom there, e-services. What change -- what limits this from happening? What limit this from happening is, we have seen in parts of the world if inflation isn't dealt with in the benefit of the customer, other parts of the category can grow like frozen pizza. If you jack up prices too fast, and you don't give better and better service and product and image, there's a risk the customer does shift. One of the most naive statements I hear in retail is inflation is your friend. That's just crazy, in my opinion. How is that? And I've heard people's justification, but it doesn't make any sense from my understanding of retail. And 2 is that, well, we're all in this together. If the inflation was 10%, we also just passed on 10%. Well, that's not real. That's not -- that means the customer is losing. Is there other ways you can split this pie that you can create a better outcome for the customer, a better outcome for franchisees and for team members and so on. And I'm going to give you an example of that. So when I think about this industry, the QSR competitors are growing the total market. So people are leaving particularly carrier. I think the drive-through is still quite healthy from what we know of third-party data we see. The drive-through is healthy, delivery is healthy, but the restauranting and the takeaway business is shrinking as a rule. So overall, QSR is driving the delivery business. The challenge, however, and we've said this, hopefully, you've seen in presentations before, there's not enough human beings on the planet to deliver the amount of growth that's happening in digital. We saw that before the pandemic. We're seeing it now. We saw it in markets that were way more penetrated like South Korea and China and Dubai pre the pandemic. We could see it here in Japan pre the pandemic. We could see it in Europe. There just isn't enough people who want to deliver, to deliver the number of packages when they're replacing your lifestyle of you going and getting all your packages. And so whilst we're only a small part, if we can be the most efficient and the fastest that we can actually do more with less, we can be the wage leader profitably so that we can make sure that we're not passing that inefficiency on the customer. Let me give you an example of that. Actually, I have one more slide before I get to that. When we think about this, we think about, where in the category, you'll try Peter Rice bowl and there's some products that are coming out in Australia in the next 6 months. Where are there other segments of the market that we can tailor to meet customer needs as delivery keeps booming. One of the -- as much as our pizza brings people closer, one of the things that is a space that's been growing quite dramatically is the single consumer. So that is a part of the market that we haven't embrace as heavily in the past. But in the delivery boom, the aggregators did open that door, and now that's a piece of the market that we still want to be able to chase. But there's even other meal occasions. When we look at a heavy or super heavy or medium user, they would buy from us even more often if we did other things, and we can see that as we look at their customer lifetime value. So we think about our menu offering. We keep it -- we look at it through the prism of rather than in the past, we were a very transactional business. We looked at the profitability of an order, and we made everything about that transaction. Today, we look more over a lifetime value curve. What other meal occasions and it's really quite surprising to us when we see a customer buying a $7 order and a $60 order. If you're punitive in one of those experiences, a bad delivery or a punitive pricing on carryout, you could lose that customer and lose that whole lifetime transaction. So by tailoring our menu with a very customer-focused mindset, we also aim to mostly internally franchise. There's something about entitlement in this business that if you bought it from outside, you feel we're obligated to you to make a success. If you grow up in this business like we have, I feel like it's my obligation to continue to build this business and my obligation to give other people an opportunity, which leads to stronger unit economics because they're just better operators and a much more sustainable business is also what we focus on. And as many of you know, we've now -- and there's going to be a lot of numbers coming out over the coming 6 to 12 months. We've done a whole baseline study for our business. We've now been in the moment of setting all of our targets to bring those targets to market about specifically what we're working on in different buckets, and we're working with some of our world-class partners to achieve that. In some cases, we're even working with new partners. And you'll be able to see all of that reported relatively soon in very actionable steps. The most lifting thing for me as a CEO, we're not going to be relying to achieve our targets solely on things that we can't control. To hit the things that we need to hit, most of it is actually in our control. Most of it, there is a road map that says, we can get there. So that's what's so exciting. Years ago, when we first started this, and we had a couple of false starts, a lot of it just -- it was really hard to get a sense. If it went too early, customers didn't give you credit, and sometimes free range chicken for example, or hormone-free beef, customers couldn't taste it, couldn't see it, cost a lot more. We're not prepared to pay for it was a failed concept. But we're now in a different cycle. Customers do appreciate more of these sort of more sustainable practices, but it goes way beyond that and understanding how we know how to manage our fleet, what the future of our food looks like, the sustainability of our stores, the technology that has improved in that area. So when we think about our people, our food, our stores, there really is genuine tangible things that we can actually share that says this is what we're going to go after. And of course, we're in the value business, and value is not just price. It's what you get for the price. So as we think through -- and there's more activity now than it probably hit in our history because we're happy to innovate really hard and really fast with the amount of inflation that's around us. And we're constantly going back to product, service -- product, service and image for that price. We've talked a lot about more for more, and more for more sometimes can be something that's less transparent in the product you bought, but it might be in the execution of the quality of the image, the quality of the packaging, the quality of the speed of service to deliver on that. And it's this beautiful virtuous cycle as a business that -- you'll see in a minute, I'm going to give you the numbers of as we reduce our delivery areas and our delivery cost, we increase our store count, therefore, we execute. We're closer to the customer, better delivery times, also easier to pick up, which grows more sales, which increases our advertising funds, which we're able to market to these new customers, improves our NPS scores ultimately, more promoters and attractors and then you just keep going in the cycle. We do see places on the planet where there's a limit. You walk in Maribor, you walk into Gympie, stores doing $60,000 and you're right the middle of 5,000 homes. And in every direction is 3 or 5 minutes. It's not easy to put another store in that area. So you've now got to deal with the capacity of how do you keep these 60 become a 70 and 80, 90, 100 or whatever, right? But there are places where there is a limit, but they're fewer than they are. There's more common with expanding territories or suburbs that are branching out. We have density of apartments. I look at Hamilton and Brisbane or if I look at West End in Brisbane and that would consider tiny little areas not too long ago. But with the density that's built into those areas already start thinking that there is viability for another store, unlike a Gympie and Maribor as examples. So with the growth in the national advertising, we use the word television, but it's above-the-line advertising. It can be television can be other digital platforms. and just gives you more firepower to have a bigger share of voice in the eyes of our customers. In a place like Japan, when we wish to map out the brands, it seemed that Pizza La blinked at 540 stores, and nobody got bigger than that. And so Pizza La became the role model for Domino's and Pizza Hut and it meant that you only bought television the Christmas, New Year and Golden Week because that's where you can sustain with 540 stores. But as we were able to branch out with new pricing models, new product innovation, better improved service and so on, we could open the market. We could increase our television that we can now be on televising 52 weeks of the year and change behavior. And we can see that brands of note that people are aware of in Japan seem to be about 1,000 stores and above, and we haven't even got there yet. So that's also what inspires us. And we've got to be disciplined that, along the way, with that leverage, we pass it through to unit economics so that we're passing back through a reduced spend on advertising whilst we're spending more on advertising, we've got more stores. So that individual economic unit is getting leverage into the bigger pie. Same thing with labor. How do you leverage your labor with small delivery areas and make sure you're efficient at that? Because in a place like Japan where purchase cycles are still much lower than they are in places like Germany or Australia, and therefore, the recovery periods are longer, you need to make sure that you're passing enough efficiency for you to keep feeding the tiger to keep growing, if that makes sense. The other thing about smaller delivery areas is that drivers to get the ability to earn more, you can pay them more, which means you get a better driver pool as well. You've heard me use the old metric. If you're doing 4 deliveries in an hour, [indiscernible] it costs you $20 an hour, the base cost is $5 of delivery. If you can do 5, you can pay $25 and have the same base cost. If you can do 6 and so on. It's a pretty simple math. Unfortunately, it's not as pure as that when you do it because you're going in incrementalism of efficiencies. And so it's often happening in little pieces. But what does happen, the big drivers of efficient delivery for us is more electric vehicles, whether they be bikes or scooters, cars are inefficient. Cars have the highest cost, and obviously, the worst sustainability. A 2-time vehicle delivering 3 or 4 kilograms of food is 2022, it's ridiculous, right? So the more we can focus on the reliance of getting rid of cars, but also bikes are more accessible. They're closer to the store. You don't have to get in and out of car parks and find car parks on the road. Bikes get to the customer, but bike do have a limitation. They can't get on freeways. They can't get out on highways. And there are certain roads they can't get to. So as you get stores closer, you don't need to cross as many highways. You don't need to go through as many of those areas. You can also -- more women ride bikes than drive cars, can't tell you why, but it's across the world. The more bikes we use, the more women riders we get or more -- so we're getting access to the other 51% of the world's population. We're also able to go down 1 or 2 years in age because to have a car, it's often you've got to be older to get a car license versus a bike and use of a bike. And we're providing the vehicle. In many markets, migrants don't bring a vehicle to the job, whereas we're able to supply a vehicle and maintain that vehicle, which means that we've won some widening employment. So a lot of these things assist us in driving better delivery times, better access to the market, better -- a wider variety of team members to access. And what I'm about to show you is that the difference between the top 10% and the bottom 10% of our stores are still about 35%. And the difference, besides the fact of use of electric bike, which is all sort of integrated as biology, they just have significantly shorter run times. Now a run time when I show you, that's the total time of driving to the customer and driving back. If it's 5 minutes has most likely 5 minutes back, although they don't always align, right? You might have to have a different route back. So that's what we call a run time in our business. And the better we can deal with that, the more elasticity, so the lowering of the run time builds a stronger, more robust business. And this has been a slide we've already shown in the past. So it's what showing you again. This is Bradbury in New South Wales out in near Campbelltown out west. And you can see here the amount of deliveries that have -- that are inefficient, the amount of reds. And by putting a store in and how quickly you improve that as a business, and I think we've already put a third store up here since then, if I understand, I remember. And these are real numbers. So these are the actual run times of the worst 10% and the best 10% right across the business. And so when people think that Australia is the most carved out, we still have stores with long run times. We still have bottom 10% still completely inefficient. It's -- we even show our business if we could get the whole business under 10%, what it would mean -- sorry, under 10-minute run times, which is our ideal to be under 10 minutes. And it should be no surprise that the best market for profitability in this are the Netherlands in Japan because they genuinely do have some of the better numbers, particularly the Netherlands, which is almost exclusively bikes. They do have some scooters.

[indiscernible]

Couldn't be more. Yes, couldn't be more. What will be saving some of these stores is that they still are getting sales from those areas. So it's covering some of the fixed and semi-fixed costs, but it's doing it at a much lower margin. So like that franchisee was telling and just sharing with you doing $50,000. He's not making as much as he should out of $50,000, but it's still profitable, but is margins are way worse than they should be. Does that make sense? So it's hiding the real profitability of what should be in that business if they reduce it. But you can see where a huge amount of work to be done in the Leiden part of our business. It's the ones that want to do the lease and other change. It's harder to deal with these comprehensions. It just seems that if I have all of these homes that do all the sales, I don't want to let them go. Because, in my business, territory is goodwill. And if I give up some of that territory, I've given up the goodwill. And if I don't open the store in that area -- or in some cases, this particular franchisee who's talking to me, those 2,000 homes that we'll cut off will be unserviceable. They don't sustain another store. So when we drop those -- fees because they're a little tiny pocket that's just outside this area called Park Regin Brisbane, it's just 2,000 isolated homes. There isn't no -- that 2,000 homes do not sustain a store today. Then there lies the question, could a truck do those 1 to 3 days a week and do another area 1 to 3 days a week and is that how you access those? And these are questions we haven't answered yet, and that's why we haven't made a big deal about the truck to shareholders yet because it's still very much an exploratory programs of innovation. But it is, in some cases, we may cut off area that can't -- that won't be serviced, but it's still the right thing to do because that inefficiency is being passed back on to the rest of the business. Another way of saying this is to sustain these stores that you see in the blue. We're already charging prices we shouldn't be charging or we -- that these stores don't need to charge that. In other words, we could even be more competitive if we didn't have the stores that are carrying and lifting up our averages. So we have the price to keep the whole system viable. Does that make sense? It's not the right way to run a business in the long term. So strong unit economics with experienced franchisees means we're having more stores. And we talk about, in our office, with new team members that are joining the office, we keep reminding them it's all about strong unit economics. Our P&Ls don't mean anything -- it can't grow without franchisees P&Ls growing. And Dave Barnes is the next franchise, been a franchise for 33 years. He's now the CEO of Australia. He walks in. He watches our weekly P&L. He sees the franchisee weekly P&L and the company's weekly P&L. And it's just -- we obviously can't show our franchisees our weekly P&L, but the P&L just drops. If sales go up, we both got it. If sales come down, we all go down. They are completely aligned. It's all about more volume, right? And what we're so proud about, you saw it in the Ronald Decker story, and you know the story all over our business is that you can be a team member who becomes a store manager. You do a great job. You aspire to be a franchisee. We could help fund you into that. If you do a great job as a single unit franchisee, you may aspire to be a multiunit owner, which is what most of the franchisees aspire to be. We -- you then are on your own. You're out there getting finance. You don't need us anymore. You're building your own little empire and some will come up into our business like Martin and Ronald and myself and Dave Burness and many, many other of our leaders that just did this beautiful cycle. And we call this the path to excellence. How you can start as it -- how many businesses out there you can start as a team member and you could become an owner or an executive?

[indiscernible]

The answer is across the board, we don't, but in well-run franchises, we do. And so a real run franchise is where you just continue to grow people. What we're changing with that is we're currently launching what we call the path to excellence app to then take it back up into a more centralized world. So the path to excellence app, which is literally rolling in Australia as we in test stores right now, it's been in production for 2.5 years is that you enter the app and you begin your journey where you've got to do physical in-store training and you can do online training. And as you go up, we start to see who you are as well, and we start to tell you the story on the way through. So there's videos telling you. So we're not leaving it in the hands of managers and franchisees to constantly tell the story. We're now telling it as a group. But you're right. If one of the things our Board asks us all the time, is that something that's that entrenched and you go, unfortunately, it's not. Not every owner in our business is innately growing people to move out into the system. Some franchise owners and managers like to hold their team, and they don't like to let them go because I have put all this energy into you, I don't want to the out. Kakiuchi who's sitting just to my right here, has grown, gosh, how many franchises in this business here and always at his sacrifice is Kakiuchi runs the corporate stores, one of the biggest corporate networks in all of Domino's Pizza. And every -- we've gone from 0 to nearly 500 franchise stores, was it 480, some of that?

520.

From 520, which then goes over to [indiscernible], in the space of, what, 8 years, and all of that pretty not all of it, but the majority of that came at that Sakis here to make because he was training these people who then heat the retrain to replace them in his business. That's an example of someone who understands the path to excellence. But not everybody is Kakiuchi-san. Some people like to keep their own people in. So hopefully, the app will change some of that. And in fact, it was inspired by Japan because it uses Avatar. You build your own avatar and you go to this whole journey, keep a track of your cabinet as you go, you get rewards. It's a super call. I've actually got on my phone, I can show a demo if anybody wants to see it around about. But anyway, let's listen to those who actually do all the stuff, not just run around the world like me. So I hand it over to you, Josh, I think. Any questions before I sit down. Any other questions? [indiscernible]

Let's go quick off that one. It's a bit scary seeing yourself next. Look, I thought I might start by recognizing the amazing talent we have in our business. And when you look at these people around the room and you get to meet many of them over the journey over the next couple of days. There's over 120 years of experience just on these bases alone. And we actually did that exercise back about 4 or 5 weeks ago where we got together as a global leadership team, and we added up the numbers and we said, "Well, look, there's actually 400 plus years of experience in the room. And I think that's what Domino's brings. So kind of answers your question a little bit. Do people know that, but that's -- it's already happening, but we're not doing a good enough job with all the newcomers that come in. But these are the guys that have been with us from the start. I mean, look at Kakiuchi-san. I think you've been here for just to bear all of it. We've got Sasaki-san that was here for just about all of it as well. So these are the people that light up our business and been guiding our business regardless of what throws our way. I mean, if we didn't have this team through COVID, it would have been in a different position. I guarantee you that. All right. So as I stand here today, we are 919 stores. And I think -- which is extraordinary because when we met 3 years ago, we've actually grown 367 stores. So it's incredible, incredible growth for our business. And just -- what I'm going to show to you today is that this is all part of our strategy. And I'm going to take you on a bit of an nostalgic view back of when we stood up there in 2019, and we took you through what our strategy was. And that was important because I think it will give you a sense of the trajectory that we started before we even heard of that word COVID, right? So we have no idea of what that meant. And I think it will also be helpful to put some context around the rebasing that we spoke about in the last Investor Day. And I think [indiscernible] I say help you understand where we're going, and why we're not done yet? Why we got a lot more to go and why the strategy is still sound? It doesn't change. Strategy just doesn't change. It does sort of move a little bit. But it doesn't just change because we've got something different. So let me take you back through this. We outlined this pre-pandemic. And for the new people -- who was actually in the investor to the last time? Just a show hands. So got a few people. So you recognize this. So just as a reminder, we -- our business was a special occasion business. That's what we spoke about. And it always made me nervous. We said my first time I had to do an investor tour, I had to defend the Christmas that I wasn't even part of because that's all anybody wanted to talk about. And that makes a CEO nervous, makes everyone nervous when you're only sort of making -- you're making most of your profits through that time. And I think what was going on is that the prevailing wisdom for that special occasion business was that was the only place people wanted to eat pizza. And that just simply wasn't true. So we started the process. As we do with every single thing we do, we start with research. And we start looking at, well, what are those -- what are other things that we can do here? And what we realized is that, to the contrary, they didn't want to just see at Christmas. They actually just saw too many barriers. The price was too high. The speed of service wasn't good enough. We had 2 bigger bundles. We're trying to sell the most amount of pizza to people, and that's not what customers wanted. And then we had the perceptions of an unbalanced meal. So people needed something more in Japan. Pizza is not a staple yet. We plan it to be, but it's not a staple yet. And I think if McDonald's can get burgers in at 3,000, 4,000 stores, there's an opportunity there. So our job as leaders in the business, we started breaking down those barriers. We started working out, well, how do we unlock these? How do we play to win? How do we find ways where we can get into family times together? Meal as a task, the single pizza consumer or the single solo launch day, watching sport with your friends. And there was another one there. I think it was drinking at home by yourself is actually a big category here. And I think we've all done a bit of that over COVID, right. But all these areas were things that we just had to break down barriers of. But we got to realize it's not just simple as come in lower price, create volume, especially not in Japan, where you lower price from where you were and people go, what's wrong with it? What did you do to it to get it to that price? So we had to come out it strategically. Customers were really put off by having a minimum delivery fee. They weren't sure if they want to trial Domino's at such a high price. Remember, it's not as eaten. That's a high risk. You got a family, someone want to survive pizza. They're not sure if they want to invest in that. They also didn't want people coming up to their doors. Delivery wasn't as big a thing. We're the only ones really doing it. Then Amazon started doing it a little bit more, and then COVID changed everything from there. So what do we do? We remove the minimum delivery fee. We also launched a thing as Domino's as you like. We will deliver any way you like. You're in addressing here, no worries, we'll drop it off. No problem. If you want to pick up from a store without talking to us, no problem. Whatever you want, easy. So reducing these barriers. We had bundles, just too big. So buy one get one free. You heard about this throughout all the Investor Days. That's all good. It did really well for us. But what about the 1, the 3, the 5 pizza consumers. They just didn't have an answer, and we didn't have an answer to give them. And so we went to a hard price carrier. That unlocks that 1 pizza consumer, that unlocks the 3 person consumer. But it actually got something even better. We're actually -- people in Japan and [indiscernible] people in depend. People all around the world don't like throwing away excess food. That's true in Japan. They don't -- the love of leftover is probably not something we would say to pizza in Japan. So those big bundles didn't actually help us. So now we've got the appropriate sized meal options and people rewarded us for that. Family occasion is a massive barrier for us. We had a lot of feedback and a lot of research that indicated that we had an unbalanced menu. In Japan, rice is a big option. It's almost -- it's a staple. You have to have rice. So we launched a thing called The Pizza Rice Bowl, which are absolutely delicious. And we're going to get -- you guys are going to get a chance to try these. That helped with the family occasion, but it also helped with the meal as a task, because it's actually a hearty meal, okay? So this single pizza -- a single user who wants something from us, may not want a pizza. Pizza Rice Bowl, helped us get there. And then we started playing with snacking options. We launched things like we upweighted our side offerings. And we launched things like thick shakes. What's really call that thick shakes is it, it's just another way to open the door for potential pizza consumers down the track. And by the way, when we look at our numbers, we can actually prove that through our CLV process. And I think that's a testament to why we do these types of things. All right. So let's talk a little bit about the team. Why did we think we had what it took Well, we had this tenure. I just spoke about tenure and our management team. But it's not just tenure and our management team. We've got tenure all the way through our business. And this is what led to more and more franchising. So we actually just plan to provide much more opportunity -- greater opportunity for franchisees to become multiunit franchisees. This meant that we've grown our base by 15%, but in turn, they've actually grown it by 80% themselves through multiunit ownership. It's actually -- it was actually until we bought the Taiwanese business that we actually had the most stores per franchisee. And then we buy Taiwan, and they've actually got even more. But we're not far off. And I think that's a testament to the opportunity that the franchisees see in our business as well. We also often talk about taking advantage of the shift from the convenience stores. When they've gone from big sites -- sorry, small sites and they want to get into the bigger sites, we've taken advantage of that. And we've been able to unlock regional towns, even in Tokyo, we found sites that are appropriate for us. But also through COVID, COVID is actually an interesting thing to draw too here because -- whilst -- everyone was closing down businesses and a bit unsure of the future, we were saying, yes, let's go. We've got sites. Let's go after it. I remember sitting in our development meetings on a weekly basis, and hearing, hey, we've just got a site in this area. We haven't been able to find a site here for 8 to 10 years. All of a sudden, through COVID, we've got these sites. We've got availability. So we just took the opportunity around with it. Quite often, you're actually locking in to even better sites at lower cost. And that's the other opportunity that we were able to capitalize on. So we knew we had -- we needed more stores. We needed them closer to the customer. And we always talked about this 1,000 stores go live, like we weren't national until we got to these 1,000 stores. Now is it 1,000 stores? Is it 1,100? Is it 1,200? It's around about that. We were a company that -- and a business that we're in Tokyo, Osaka and Nagoya, and that was it. But in partnership with a stronger franchisee base, we're able to access all these areas. And what does that mean? And Don talked about density. We've increased our density, that little [indiscernible] short of [indiscernible]. That's exactly what's going on as well. But not doing it just with corporate stores now. We've got a very active franchise base. Of course, corporate is a good way of going to new prefectures because then we can build the bench strength and incubate those managers, and then they become franchisees in turn. But our strength of our franchise base is certainly helping us expand at a faster rate than we ever have. And of course, we talked about, well, how do we lower some of the cost out in these areas? Dough projects was a big one. So for the first time ever, we're doing back-of-house to dough. This was something that wasn't available 3 years ago. 2019, we weren't talking about back-of-house to dough. Guess, well, we are. We've got actually pretty good expertise. Australia does back-of-house dough, New Zealand, Germany, we know what we're doing in this space. But this enabled us to go into those areas. But talk about freight harmonization. What this really means is that it's national pricing. It enables regional stores to access our national grid pricing, giving them a competitive advantage, making them profitable. Strategic refranchising is a big one for us. So we've expanded through franchising. And balancing the equation of the expansion of their core metropolitan areas through our corporate business, and adding pioneer franchisees to some of these prefectures has been incredible for our business, and will continue to be. Let me show you what this looks like because I think it's -- you can see this in action -- if you look at how this works is that the ones in red are 100% franchised, and the ones with blue, corporate and franchise as well. So you can see that this only franchise in some areas, which is incredible, shows you strength in those areas. So that was the strategy. And then came, what we're calling a rebasing. We've just gone through the most extraordinary period of growth in our business, and probably the most extraordinary one around the world in Domino's. I mean the guys in the U.S. are calling us [indiscernible], how you guys doing? and how are you keeping up? Well, we were doing it. And we sort of thought that we knew there was an element of a COVID tailwind, but we couldn't really be sure how significant it was. And it was affecting customers in different ways all around the world. We've seen -- we'd have actually gone through state of emergency lockdowns in many places. We've had regional lockdowns. We had prefectural lockdowns, and we've opened up, and we're okay. And then we're watching Netherlands, France, other places around the world open up, and we're going, okay, well, that's okay. But what actually happened is that we saw what we're calling rebasing. We saw customer accounts go down. And we -- as we do, we anticipate this V-shape recovery. We spoke about this in the last Investor Day. But because we're not in this habit of saving ourselves rich, we kept all our fixed costs where they were. So we kept our advertising. We kept our labor rates. And in fact, because we always look for the opportunities to build market share, thinking that everyone is going through the same thing, we actually went even more aggressive. We got more aggressive in pricing, trying to get those customer counts back up. And what that meant is that when we realized, it wasn't a V and it was a rebasing that although customer counts settled to a new higher rate than pre COVID is our margins through that period of time will hurt, took a little bit of time to unpack that and unwind that. And we did that, and we did that prior to Christmas, which is a very important trading time for us. So despite the rebasing, despite all these things that are happening in our business, the thing you have to look at is we've got more and more and more frequent customers than prior to COVID. We actually segment our customers. And you can see this here, this is what this chart says. So you can see it, and I'm not in your way. But right up the frequency curve, you can see that we've got more customers. This gives us confidence about our future in Japan. Basically, it's showing that customers are choosing us more and more often. Now what you will see here is a small decline in the new. So that's pretty natural. What you'll actually see is those people are moving up and doing frequent and going up in the light all the way through. What's more encouraging is when you look at the medium, the heavy, and the super heavy those people that move through, and they're at a greater rate than they were prior to COVID. And what that means is you've got a bigger loyal base, people that don't need as much marketing, people that just are buying off you frequently because you've got the right PSI and the right value equation for them. So how does this translate? Well, when we look across the business, we've got more customers delivering higher sales than prior to the rebasing. And I mentioned the issue that the corporate stores had -- but -- and when we anticipate this V-shaped recovery. But what I look to hear is what we saw with franchisees. Franchisees responded appropriately to us. They had -- they could unwind some cost structures much faster than we could as a corporate business. And this is an indication of how strong the model is because what we can see now is that their sales and profits are higher than before COVID. Now of course, there's a...

You're looking at 12 months to March '22 is the rebase [indiscernible].

Yes, I'll get to that. So there is a bit of -- there's a bit of noise in there, but that's what we can see. So there's a little bit of a period of rebasing before that, but that's what we're seeing. We're still setting at seeing the data, it is higher than that. So it will be clean numbers when we come out the other side, but we're seeing those still trending in the right direction. So where are we now? Well, look, we've got a significantly stronger base. We've got a lot more -- we're reaching a lot more customers, a lot more stores. We're closer to them. They're more frequent than before. And they're serviced by more franchisees, operating much larger businesses. And so are we in the corporate system as well. Back in 2013, when we bought the business, we were basically not #1 in any prefectures. We were actually only in 17 prefectures. And what you can see in 2019, when we spoke to you, we were #1 in 8 prefectures. Of the 36 we're in, and now in 47. And we're in 20 -- #1 position we got. Yes, #1 in 20 prefectures, and it shows you the growth. It's still a goal to be #1 in East neighborhood. Now just being #1 in a prefecture in pizza or in store count is not the goal. We're not done yet. So don't take that. That's not what I'm trying to represent here. We've still got a lot of -- long way to go, even if we are #1 in those prefactures. But our goal is to turn this all red, and we're well on our way to doing that. So we've expanded into 47 prefectures. And I think it was in this room 3 years ago where -- I'm not sure who it was, they put up their hand and said, well, why aren't you in Hokkaido? And I think my response back then was we just don't have the -- any way to get there. We have to stand up dough facilities. We have to do a range of different things. But there's 5 million people out there that we just couldn't service. Back-of-house to dough, harmonizing of freight allowed us to get up there. And we're 22 stores up there now. I would say that in the next couple of years, and by the way, we're already #2. In the next couple of years, we'll be #1. And that will actually take a fairly big stronghold of Pizza Hut who are operating -- that's actually Pizza Hut's largest franchisee up in Hokkaido. So let's have a look at the market and what the pizza market is doing. It's -- about 4 years ago, we took the #1 position in pizza. And we've seen sort of people pretty -- the other competitor is pretty close. But what's pleasing, we've been able to grow over the last 4 years. If you look at 2013, we are actually 3x the size in 9 years. So to give you an idea of the -- how fast we're growing. And whilst a lot of the growth is in the whole pizza market is driven by us, the thing to take away here is that people are eating more and more pizza, and we are growing share of stomach as well as market share.

Yes. Sorry, wanted to [indiscernible]

Sorry, yes. So you got independent, you have small and mid- and independent chains.

You know which one [indiscernible] are?

[indiscernible] which one is the independence and which one has the [indiscernible]

[indiscernible] under 50 stores.

Yes. Under 50 stores here.

And all 50 stores, we got high [indiscernible]

Yes. And there's quite a few of them.

Yes. These are regional players who might be in 2 prefectures or 3 prefectures.

Yes. There's like brands like Chicago Pizza. They might have 80 stores. There's Napoli Pizza they might have -- in store recounts, 2 of those together. They've got 100-odd stores. So you got the little chains that stood up, more Japanese style pizzas, maybe a little bit more sit down, a little bit of delivery at a range of different pizza players. Not so much in Tokyo. Tokyo is more -- Tokyo, Sakai and Nagoya, they seem to be more us. And you'll see Pizza Huts, and you'll see Pizzas wars there as well. All right. So where do we have to go from here? I think that's probably the thing we're here to see. I think we're not sliding down, we've created this clear path in the business. What we know is scale matters, like it really does matter. And we've demonstrated to date the benefits of actually reaching the scale and becoming #1 in every single prefecture in every neighborhood for that matter. This is exactly what we intend to do. Delivery demand is really, really strong and growing. And we've seen through the initiatives that of no minimum delivery is that we have to provide an answer and access -- we're going to access more demand. And the way to access more demand is to manufacture the products. We're going to lower the cost to them. And that's what Don was taking you through before. We know there's so many more customers for us to reach, and frequency we can build out of this. So we just have to break down these barriers. So it's almost like what we did in 2019. We have to go back through that process. and break down those barriers again. So I'm going to talk you through that a little bit. So we started researching. Again, our business has got a lot of research through, and we start looking at the barriers to expand -- expanding our customer base prior to COVID. Now we're looking at what are we looking -- where can we expand post COVID? And one thing you got to remember is that whilst the scale of our marketing funds actually allows us to do a lot more things. Back then, we were wondering about -- we talked about -- in some of these investor days, we were 23 weeks a year on TV, 30 weeks at the next stage. Now we're 52 weeks. So we're able to access more and more opportunities to grow our business. But we have to look at the customer segments, and we have to look at where the large number of customers are, but -- we can look at those, but we look for also areas where there's a relatively small take-up of pizza, occasions like weekday solo lunches, late lunch gathering, solo weekends and so-called meal as a task. We know that these are all areas that we can play and win in. So let's have a look at some of the barriers in these occasions. And we are really focused in these areas, where the market size is higher and the entry is particularly easy. Well, I got to caution here though that meal as a task. This is such a big part of the consumer set, but it's not an easy one. Because quite typically, you've got high barriers because you've got to find the right product for that. Not everyone wants to eat pizza in that occasion. So we have to persuade people to try. There's actually no real silver bullet, but we're on that path because we've already got no minimum delivery. We've got pizza rice bowls. We've got some other products that you may even see in the next few days that will help answer that segment. But again, no silver bullet. We have -- we also want to sort of capitalize on our strong position in the occasions that we're already in. Just because you've got a lot of pizza consumption in that occasion, it doesn't mean you're done. It means that, okay, you've actually got a whole cohort of consumers that really love you, you've just got to work in way keep them in buying more and more frequently off you. There's plenty of room to grow in those areas. I mentioned before the importance of -- yes?

[indiscernible]

Yes. Yes, sure.

Its the time to get the pizza more often. Do you have any numbers on that, metrics on that or do you [indiscernible]

Well, it goes back to the frequency chart. So you're talking about in the [indiscernible] segments.

well, the starting point is you're going to buy [indiscernible] pizzas for Christmas I guess we're trying to get to like a family might buy a pizza for a dinner or got like pizza sold at Internet. Is that transition working? I just wondered if you give a sense of [indiscernible]

[indiscernible] this is exactly what I shared. So you've got this transition of the funds. So new customers coming in and as they transition up the funnel. You get more and more frequency.

Any color on which types of customers is contributing to that greater frequency? Is it like solo dinner or solo lunch, but where are you getting traction?

It's a good question. It's not -- why to think about consumers is that it's not just what -- you know yourself. So you're sitting back there, you're thinking, okay, what do I need Domino's for? So you might buy -- you buy meals as a task through maybe a lunch day, right? But then Friday night comes around, and you're buying for your family. And then you might have something else. You might buy Christmas as well. So it's not as 1 dimensional as that. So just to simply go, well, this is how many we're getting out of single you got to think our customers as more dynamic than that. They more like when you go to the grocery stores, they always talk about, well, what's in the basket of goods. Well, it's like baskets of occasions, if each customer might have 4 or 5. So I wish I could give you a definitive number like we are growing meals as a task by x, what I can say to you is that we're selling a lot more pizza rice bowls. And that could be with bundles and things like that. But we can see that our lunchtime products. If you isolate that, we're selling a lot more single use. And minimum delivery -- no minimum delivery has unlocked that. So we actually now get more volume through our lunch time. We're a pretty decent lunchtime business anyway in Japan, but now you're starting to see a lot more frequency of those products going out the doors. So yes, what I hope to get to is where we are able to string these together. And we do use -- we have a unified customer database where we can actually string those profiles together. And it will spit out a certain profile where we will have to market to them. So if you then get an EDM, [indiscernible] you be able to say, well, this customer is -- has a family, this customer also likes a lunch time. He loves for the Australian state of origin, so we're going to put a deal in for that and so on and so forth because I think where I guess really rich for us is where we can serve up content that makes sense to that particular consumer. And that's where it gets exciting. Yes. And that...

Sorry. So 1 customer in a year, how often are they ordering, how many times?

One customer per year, sorry, what was that?

[indiscernible] average ordering per customer.

So I can give you some stats. So we know that we've still got about 50%, 60% that only come to us once a year at Christmas time. And we're still dealing -- remember the business was built on that. But what we're seeing -- and this is part of the strategy, right, is to build people up and through this. Hopefully, I can -- in 10 years' time, we're talking about this being really big, and they're sort of starting to get much bigger as well. But the frequency has grown enormously. We used to talk about 2x a year as an average. Now we're talking 4% to 5% as an average as well.

[indiscernible] is that the whole target -- so if you look at what the [indiscernible]

Sorry, where are you, sir?

Yes, so if you [indiscernible] per stores last particularly transaction data [indiscernible] single [indiscernible]

Yes. Literally, I mean, barbell strategy is really important. We're moving our whole head space as a business to customer lifetime value. And we actually look -- yes. So the barbell strategy unlocks those occasions that then enables them to go through that frequency curve to more and more occasions as they go. So that is part of the barbell strategy.

So you're getting more carryout as the carbs coming out. So that's showing an average weekly sale that's getting stronger at the same time. And we would like to I said, as much as we can point to deliveries back to [indiscernible] carving that like-for-like [indiscernible] the average. Does that make sense?

Yes. It does. Yes, no it makes sense.

[indiscernible] look like say the Australian customer, right, like per year and a Japanese customer. I mean what is the difference of like there? Is that in term Australians like 20x more likely to hit at Domino's [indiscernible] what's the [indiscernible]

I don't know the exact number, but much more frequent customers. There are -- some had got a little bit different to store like the reverse you're very heavy on [indiscernible] and much less like. So it's a reverse of that [indiscernible]

[indiscernible] of frequent users.

That is less of them, but they buy that. So you've got potentially half the markets buying pizza, but the worst is that a lot of the business comes from to be the [indiscernible] So it's literally a reverse of that because Australia, we have 125 million people that buy some part of [indiscernible] buying Christmas and Golden Week, call a birthday. Even though Josh and Titan teams and the whole leadership team have moved people down, it's usually hardly anybody with any use of formula. I mean there was [indiscernible]. So you haven't have you talked about growth, [indiscernible]

So the Australia is coming to what are a previous [indiscernible]

So we don't -- we try not to talk about the average ranges as reverse. So we call our main to target customers even [indiscernible]. Yes. But average is got wise. And when you really try to grow a business, et cetera, like Australia is you're really trying to get more people into that from medium to that heavy because I just want to sum much more money. Does that make sense?

That makes sense.

[indiscernible] more even patents in everything that we buy -- is there any mile cases there is to ship people off the occasion.

I'd also caution that comparing Australia and Japan is probably not the right thing to -- as I think about where I kind of think about it, Japan as where Australia was at sort of 400 stores. Without that penetration, we're still a long way to go. And so making that where are we in that curve may lead you down along the path, trying -- it's a different maturity cycles, it's completely different. We've got a big corporate place, different franchisees.

The same [indiscernible] 3,000 stores on 124 million people, [ 500 stores ] momentous [indiscernible]. And then whilst they're not expecting to be[indiscernible]

[indiscernible] that's true. And driving more occasions.

In terms of earnings profile?

Profile, yes.

[indiscernible].

[indiscernible]

Yes. Obviously, at every time we meet -- I think I like to sleep at night. And having a business that only makes money at Christmas and [indiscernible] was what I walked into. Now [indiscernible] So we make money to the whole at [indiscernible], and that was part of [indiscernible] up is that [indiscernible]

[indiscernible] have say, are they changing in the market in more trying to target those customers well. [indiscernible] several things, Jay, on here. So if I look at pizza, I think [indiscernible] had right.

[indiscernible] I think I just linked [indiscernible] they just stopped doing it. The [indiscernible] business is we are 100% focused on Pizza. If you look at pizza, they've got a range of other options. They've got high-end restaurants, the fifth [indiscernible], Sushi out of the same Pizza lounge, delivering it. We're focused on pizza -- that's all we I think there was -- I can't talk from but we're not distracted but I think there was distraction to have [indiscernible] Pizza Hut also got change of ownership. So trying to figure out where the tools were in building at 1 stage, and we overtook it. And they started to sort of ramp up now. But their version of ramping up on our vision of ramping up too. Yes.

We originally said we would get to -- and I [indiscernible] back by the year at [ 6 or 8 ] or through market share gains. And I couldn't promise we would go beyond that unless we grew the market. And what we've seen in the last 3 years is a genuine shift to grow the market. So the light [indiscernible] at small bar graphs. They still work a lot of the month because they are the more frequent customer. So they're [indiscernible] rooting an [indiscernible] down to the area, and that's growing more consumption. Whereas in the first few years, the first 5 or 4 years, it was literally all this market share still. We were just switching out of customer. So there's no evidence. If you look back at that graph you showed the pizza of the market, and we have to shop somewhere else to shop, they are out of the business. Whereas in the last 3 years is a net-net add and basically donors a little bit in a later stores. But the other shops stop closing, which illustrates through consumption because their average unit is doing more and we've got more stores total assumption is growing, right? Because one is not closing any more [indiscernible] closing take [indiscernible] by the QSR. Potentially,

Yes. Because of COVID the aggregators, like the Uber these guys have really taken off, right? Has that been a tailwind, a headwind? Does that help get the normalized idea of delivery? I think it's something that was saying [indiscernible]

Yes. I think it normalizes delivery, and then open up more delivery. So the size of the market is growing. And we've got everything managed for proximate products, our systems make for -- look at our delivery times -- we're ready to go. We met with Uber last week, might be the week before. Yes, the first thing they ask, how do you do it.

The other way I look at between '95 and 2005, delivery was in decline. And the only way we grew our businesses with carried even personal in Japan, coming in, we were thinking about to the [indiscernible] pick up all this carrier business. But delivery of -- digital delivery and particularly event of the aggregators delivery boot and now the fastest growth market is market that is the fastest growth in QSR. So it's a tailwind now versus headwind.

You guys are [indiscernible] in Japan right now. So, for those deliveries do they do it for you?

No. You [indiscernible]. So we -- this is part of -- and we're talking about this cycle, this virtuous cycle. So we actually want to give through our system. We want to own the product. We want our customers to know that we own the whole value chain. And that's important for us because then we get more managers more presses, and just get on runaround. So we're very, very, very simple. We will never have an aggregate on to us. There are some pricing changes and there too. We've been in aggregate for a long time in Japan. I think that everyone talked to a -- what we [indiscernible] what -- we've been [indiscernible]. We've been on the mine probably sitdown. So this is not new for us. So whatever wire is that to [indiscernible] Yes, we get it. We know how to quite sorry, -- what it is, is we see it as a place to play it's an incremental customer from what we can sort it's another channel to go fishing. And that's what visual is the ultimate, why is that different from [indiscernible] The other [indiscernible] take action plan order going straight through our stores, and we deliver. So we own the process shareholder.

[indiscernible] We call the areas delivery. We're not breaking it out individually, but this is what we've been working on. And there's no way we would be starting ourselves today if we have eased [indiscernible] Most of their business 5 years ago, looked like it was up is really due to the [indiscernible] [indiscernible] your question on the [indiscernible]. Not only is the restaurant with the negative product or the service team consistent. [indiscernible] Now it's typically 10% of [indiscernible]. You got the delivery charge, which is going up. And sometimes if you've got a fuel charge, and other as [indiscernible] fuel charge [indiscernible] an employee [indiscernible] delivery charge, fuel charge, employee charge in some markets.. Most markets are just service and delivery, but services [indiscernible] 10%. You reverse it out on all of your [indiscernible] 10% [indiscernible] prices and [indiscernible] prices so the real cost is [indiscernible]

[indiscernible] 30%, [ 35% ] contrasts from over in Japan at the beginning of this year of last year in the plan. we overlook [indiscernible]

Yes. Yes. I was going to say.

What you guys [indiscernible] And it's the saving because it takes away the age of delivery that goes in part [indiscernible] the single biggest reason the stock that we can observe is the Asian delivery stops happening if cost of delivery on subeconomic that event for [indiscernible] a recession in the U.S. or wherever takes away that growth. And we want that growth because we want to go into that market [indiscernible]

Sorry. Well, yes, these are important points. I think also what happens with Uber, and I mean it's raining today, right? What person happens territory shrinks. We own that. We've got our own drivers. Our territory meter shrinks. We keep delivering. Why [indiscernible] deliver. They say, as a e.g. So we get the benefit of that. So that's -- there are so many different things going on in that space. But we'll try to answer everything we can about aggregators.

And as we go into the team, have pops which always benefits. [indiscernible]

Where were we? Cost of delivery. So this is something that's really, really important to us. And we talked about manufacturing profitable orders. We know in Japan that we can't just tax customers who won't deliver -- it doesn't work like that, right? So how do you build trust? How do you go relationship you all those things, by just adding surcharges, high costs, large minimum orders. It just actually just erodes the way to demand. So we know this in Japan because we have some of the lowest cost delivery in [indiscernible]. And we also know that from all the data we have, and all the influences on the cost of delivery, from delivery distance to the average time of delivery to the average rate of whatever drivers of [indiscernible]. The fact that actually got the most correlation is run time. So that's from the store to the customer and back to the store. In fact, 48%, that's actually the savings that we would get if we could deliver all our pizzas under 10 minutes. That's a pretty big upside. And when you do that, that means you can actually manufacture the profits on smaller orders. You can deliver a lot smaller items more frequently to that customer. That's where the sun and moon and everything aligned for us. And that's what we've been going after. It didn't just have an overnight. We've been talking about Project 310 for how long ago, 8 years, 9 years. We've already started that journey. We're well ahead of it, and we're still doing it. And we're going with an extra 367 stores since last time, that's part of it. Any questions on that. Okay. All right. That's actually a really important point because that's actually how we -- that's how we win in this space. That's actually -- can you talk on the one [indiscernible] Okay. So there's opportunity there. I think that's what we're saying to everyone here, absolutely huge opportunity. But just like we don't want to tax the customer, there's no point building a much bigger business than what we have right now if it just simply taxes all the communities that we're in, all the environment. So we're pretty proud of this actually. We when everyone was running in the other direction, we're standing up things that actually benefited our communities. Feel the need was a huge fund. We've given away pizzas [indiscernible] are trying to build that trust, be a great positive part of the community. Over 500,000 pizzas were given away, we've even launched our local harvest program, which is very -- my sense says that Japan doesn't have a massive agricultural industry. But Japanese understand the importance of it, and want to build it. They want to be connected to this part of Japan. So I'm really excited about that. These -- and we've actually got farmers market stores that showcase the agriculture in Japan, which is really, really high quality as everything is in Japan, which is -- it's a pleasure to see all these things. So where are we? Well, we've got to -- as you can see, a solid foundation. We've used COVID to our advantage, and that's meant that we've got a materially stronger business that we can capitalize on. Our strategy is the same. We've outlined it prior to COVID, still the same. We're going to keep executing against that barbell strategy is it. And we have our sights really set on that next milestone. 919 stores opened today, the end of the financial year is not with us. We're going to hit to [ 11 ] even before then. So we're really excited about the future. So it's up to really us to execute. And hopefully, you'll see the talent of the people who are executing when we go on the store tours and get to eat our product, and get the chat to our managers and franchisees, of which some of them are in the room today who are about the chat too.

Well, good afternoon, everybody. I will be the last speaker before Pizza. So please don't fall asleep. Hopefully, everything is excited enough. But first, let me introduce myself. This is the first time I speak to all of you. So let me start with a quick introduction of myself. This is me. Started in 1997, almost 25 years ago. So in October this year, 25 years and have started delivering pizzas just in a small store in the south area of Holland. I live in Holland, actually. And did that for a certain amount of years, then became a store manager and began my story within Domino's. So store manager for a couple of years then franchising for 8 years, all in the south region of Holland to give you an explanation of where I had my store. Actually, it was an end over, I'm not sure everybody knows the city of [indiscernible], it's actually a tax anyway.

[indiscernible]

Yes. So it's also got a good suck at all there, but I wouldn't bother with that information. and then became the Head of Operations in 2019. So I sold all my stores to other franchisee business. And then in 2021, Don just found me and tell me, well, we are having another market, and maybe you should be in there. So yes, I took the opportunity. And the funny part is, and I will tell you a little bit later on, is I never been in Taiwan. So this is actually the closest time I've been to Taiwan. So it's like a 3-hour flight from here. And the reason is that Taiwan closed our borders roughly 1.5 years ago due to COVID. And yes, so it still can't get in. So I'm running the market now for 9 months behind my laptop. So yes. And -- so in -- for the first of July or after the first of July, I'm transferring to Japan. So I actually never saw people in Taiwan in person. So if I -- so I definitely go to there in a few months after I'm transferred to here. They have like a farewell party or just something like that. Okay. I would like to talk to you a little bit about, okay, where we are at the moment, how does my team look like? And where are we now, and what is our future plan for Team Taiwan? So the first store opened in Taiwan was actually in 1989, and they started franchising in roughly about 10 years later. And it's been sold twice. So in 2007, it's sold to the Formosa Group. They are also having like the hotel chain like the Regent Hotel, for example. And in 2021, again, and that was too deeply. So we started in September 1 in 2021. And we are currently the second or the #2 as we talk about store counts in Taiwan, behind Pizza Hut. So just as a pizza chain. In some areas, we are actually #3. We're also a local player there is Napoli pizzas, they're beating us at the moment, but the same with Yes. I'm not -- it's just the same name, but it's a different one, yet. So that's where we are at the moment in system. I will talk to that a little bit later. Two warehouses at the moment. We have one in the north in the Taipei City, and we have one in the middle of the country. It's in Taichung. It's an area roughly a couple of 100 kilometers south Taipei city, roughly around 100 people working at this moment in the head office and the corporate stores and as a corporate staff members. And yes, that's roughly about the team in Taiwan. What is the current situation? 166 stores -- 167 at the moment. And what's the end game? I know 300, 400. There's a lot of potential, so maybe even more, but -- let's start with 400 then let's see what's happened afterwards. So this is my team, actually, 186 years of experience in total, mainly driven by females. I think it's a good benefit of it. And all those people here in the picture, except for Joyce, who is our CFO, are actually started in the store, also the [indiscernible], and that really helps when people start working in store and then grow through us, were done to Thelma Huang, also in the leadership team, when you have like an experienced store manager who will now become a Director or actually also the Marketing Director starts in the store -- and it helps. So the Marketing Director, the first question should always be, is this operationally doable? Yes. Okay, then we can proceed. So that's why I really like it. Rebecca, in this case has a long time of store experience herself. Yes, so Gary now is now General Manager is now in charge of the development team. And yes, the rest is here and -- yes, really happy with this team. It's really fun working with them. Good. So I'll give you a little bit of a market overview at the moment. So where are we now? We have roughly 167 stores at this moment, still opening a lot of them this month and 34 franchisees. And 34 franchisees, they are in the system between 4 or 5 years. And the oldest one is roughly around 32, 33. And that's a really a long time. My experience in Holland, for example, is the average franchisees, 8 years -- between 8 and 10 years in the system, and then they will leave. So it's even shorter than the normal marriage. But these guys are really long in the system. And also 25% of the franchisees here is female. So that's really, really impressive. And the average stores per franchisees at the moment is 4.4. There is 1 franchisee with 30-plus stores. So he is putting the average up. But the benefit of him is he's also selling his stores now to his store managers to become and start as franchisee as well. So he's got -- he's giving the store managers the opportunity to become a franchisee as well. Where are the challenges? Or where are the possibilities? The people per store, right, [indiscernible] -- sorry, 139,000 people average per store. 1-3-9. That's a number -- in my opinion, we can decrease or which can decrease well in the future, right, fortressing the stores, fortressing the area, carving out extra stores gives us the opportunity to.. So if you look to the market into our biggest competitors here, it's called Pizza Hut and Napoli. Where are we at the moment? So Pizza Hut is, for sure, at this moment, the biggest brand in Taiwan, 271 stores at this moment. And we are 95 behind it. It's still a lot, 95, but I think we can cover that up within the next few years. So in the drawing behind or below, it shows the amount of stores Pizza Hut opened in 2011 until now, and they roughly opened 100 stores. And what we did, we are the blue line. We opened 27 stores. But 10 of those 27, we opened last year or within the last 9 months. So it shows that they hardly opened any stores in the last few years before we acquired the market. And so it's mainly -- it was a market when we started, it wasn't okay. It wasn't used to get a open new stores. To give you an example, the development department was only 1 person. And that 1 person was only doing maintenance in stores. So repairing things, et cetera. So when we started in -- okay, let's restructure the development department so that they will be ready to open roughly about 25, 30 stores per year. I think we are now done with the restructuring, so we are not ready for that number. But I would like to just to give you a quick overview of where we are at the moment. And the next slide will show you the locations where we are. Most of the stores are in the west side of Taiwan. Why is that? Because on this part of the island, it's roughly around here, where there are hardly no stores, it's roughly -- it's because this area is almost nature. So I don't know big parks. No cities. All the cities are here in the west side and some here in the islands as well. We have some on the islands as well. So what's the red dots. The red dots are showing us the commissaries. -- our current commissary. So 1 is in the North, in taipei and 1 is here in Taichung. And the store -- and the comment in Taichung is supplying these stores. And the commissary here is supplying the story in the north.

Someone is on the entire preparation change a rinse distribution. Is that all owned by [indiscernible]

Yes. In Taiwan, yes, it is.

In Australia [indiscernible], we made commissary in Taiwan, in Australia, you make it in the back of the show.

Yes. So actually, the dough is make -- is prepared only in the north and then shipped to the commissary here and then shipped to stores. So it's not ideally but now it works. But with all the expansion which is going on, there will be some changes in the future as well. The funny part is on this one, and it's really fun part is that the South area is less, how do you call it, less dense but also the rich area of Taiwan is actually the north and the poor is in the south, if I can explain it correctly. But if we open a new store in the South, the sales are really amazing. If you open the store in the north where there is much density of other competition, it's tougher to get the sales up. But here in the South, it's really amazing. So just to give you an explanation of what's going on there in the market. So 3-year plan from now. What are we going to do? We are going to open, of course, some new stores, fill in stores in current regions. And so also fortressing strategy, especially in Taipei. At this moment, we are still behind Pizza what I just showed you. So we have a lot of opportunities there. Some stores have to be relocated. Why is that? Some stores are in small -- it looked like more like garages, which you saw in Japan as well, like 8 years ago. We have to relocate them to better locations. We call it. So that's one of the plans we are going to do. but also growing our franchise base. I was telling you before, we have 34 franchisees at the moment. But most of them, the youngest is 2 year between 3 and 5 years in the system. So we need young fresh blood in the system, people from corporate stores, we also store managers and supervisors from franchise stores. Now we already started that process. We have now a small pipeline, I call it, with new potential franchisees who we can bring into the system within the next few months. But also the marketing and menu innovation. I was talking about a little bit later, the brand relaunch, which is also in there and leverages DBEs, digital experience to accelerate customer engagement and sales growth. This is also a very important part of us. Being part of DPE family gives us the opportunity to use their platforms as well and to get more sales into it. And last but not least, the ESG part, I will end my presentation with. But we are already delivering, opening already 11 stores at this moment. And the first store opened in end of November or mid-November, and mainly franchise stores. So 2 of those 11 stores were corporate stores. And 9 of them were franchise stores. We already filled in the stores -- sorry, infill stores in current regions. We planned, which I will just talk about the store relocations and growing our franchise base, and especially about the new plan that we have in place for motivating franchisees to grow, but also motivating them to grow their store managers or supervisors to become a franchisee. I will talk about in short notice. What have we done so far? And more, we did a marketing and menu innovation, brand relaunch by the end of April, so roughly about 1 month ago, and already started with some ESG outroll, electric scooters, et cetera, and leverage DPE's digital expertise, again, to leverage more sales. If we talk about the dual track program to grow our franchisees, this is something we started. Okay, we started at September 1, and we would like to open new stores. We need our existing franchise base to grow, right? So what have we done so far? We give them a royalty incentive to existing franchisees. If you open the store within the next 2 years, we can give you a royalty incentive which provides you enough motivation to open a new store. We also started Project Ignite, and we coupled it from Australia, but also from Japan. And Project Ignite, we communicated to our existing franchisees, actually. And we tell them, okay, if you grow your own manager to become a franchisee you're going to lose that manager to the system, and we will give you an incentive for that to grow another manager and to grow another manager, same as what happens in Japan -- corporate system, but we do that also for the franchise system but also give really good operating managers and really good operating supervising system, a boost, okay, you are a really good operating manager in system, but you don't have enough equity to buy a new store. So we can help with that as well. I will tell you in the short notice as well. How do we do it? We provide them a management contract. So we will build a store for them. And after -- and within the 2 years, they have to go to the bank and finance the store or refinance historical. So in those 2 years, they should have enough equity to go to the bank for a loan and then start with that, and then we'll build the store or refund that store.

[indiscernible] this is at the same model in Japan, the way we learn, this isn't an incremental cost like incinerator cost.

That was an incremental cost. It's the same it's the same name, but it's just trying to use project there let me split with us as well, but really that means a different [indiscernible]

Yes. And I have some experience with this system also in Holland, where I used to work, and it really gives the young people in the business opportunity to start running a storage franchisee. And also the young guys were 18, 19 years old, I had a lock that my parents could help me starting my first store, but a lot of those people don't have that parents who can help them with. And this will give them the opportunity to start. I think that is a really good opportunity because if we provide that to them, we know for sure that they will stay on a long time in our business. Good. The next one is a short video of 60 seconds about a franchisee. He actually won a Golden Franny this year at the Las Vegas Rally. And he was the first Franny over here. And what is the Golden Franny? I would just explain. If you win your gold Franny, you belong to the 1% or 2% best-performing franchisees in the world. So not everybody wins a Gold Franny. And actually, this is the first time a franchisee in Taiwan won the Golden Franny. So it's a really big thing for him but also to the franchise community to see that within a few months, they already can achieve this one. So I will play a short video. [Presentation]

Look at his smile, right? It's really -- I started working for him immediately, but this also shows that the differentiating system are now also adapting the way we are working, and we would like to work, right, with high-volume mentality et cetera, I will talk about it a little bit later. But I remember the first day I spoke to the franchisees, it was the first week of September. And I was thinking of myself, okay, I'm going to talk to them about high-volume mentality, where do you want to go and the grow, et cetera, et cetera. I need at least 1 franchisee who is on my side just to roll out the system. Luckily, I got 3. So that was a good start. And after that, a lot followed. Still a lot of people saying, okay, let's see what the corporate stores are doing, let's see what other franchisees are doing. So wait, but more and more franchisees are willing to adapt to our system, but also work with, okay, we are now going to test a mega week or a delivery week, okay. Who wants to join? So the first meeting was 3 hands, now 6, 7, 8, 10 hands now we're showing. So it's really nice to see that is already being realized within a few months that we are there in the market. But also a new approach to marketing. The current market -- or the current marketing team was also responsible for the marketing team for the last 10 years, and they were just looking to other markets here. What is Japan doing? What is Africa doing? What is South America doing, just copy it -- copy, paste it and then start with it. So starting there, with the marketing team, we started with the CLT. We did a consumer -- a really big consumer test, and it shows us -- it gives us a good view of how the market looks at Domino's actually. And well, it actually shocked us. And I think in a few slides from now, I will show you -- I think it's even the next one. This was the outcome of the test. So we are in the left corner. It shows expensive, poor variety, right? So Domino's is expensive and poor variety. Actually, they were telling us, you're the old Grandpa company. So we have to change this, right? We are not wanting to be here at this point. We want to be here, right? And more -- so how can we bring in more variety and how can we change that? And how can we change -- do we need to change the menu, for example? Is it too confusing for customers? Or do we have a coupon strategy, which we had with like 2,000 coupons in the system, and it was really -- it was so confusing for customers. They don't know what to do anymore. So we downgrade the amount of coupons just to make it easier for customers. But also when we did that, we saw the conversion rate actually going up. So downgrading is not always bad, but it's -- in this case, it actually helped us.

[indiscernible]

Yes. Sorry.

[indiscernible]

Yes. Yes, we are. So when we -- well, actually, it was expensive and...

Natalie pizza would be the value play. They definitely are a lower price than us. We are in line with Pizza Hut, I would say, for price, a little bit lower. Yes, they would say that. But if you look at Natalie Pizza, they are value. They're down, all the way down there, they're almost half the price, but also half the quality, half the -- and all the rest of it.

Pizza underperformed those as a rule.

These aren't high-volume sort of things.

All of Japan was too expensive, all of Taiwan is too expensive initially as you're going through this. Like there's no real absolute value players we see a product service image part of our price. That's the big hole, that's what is so exciting.

[indiscernible]. The chicken issues in Taiwan, with the bird issues is that having a benefit for us in pizza?

Actually chicken is really popular in Taiwan.

Yes, very popular.

[indiscernible] .

We don't need, we sell fried chicken from fresh fryer in our business. That's just the only place in the whole world where the fryers [indiscernible] .

By the way, we're not impacted. We don't have a -- our supply chain hasn't got any shortages for chicken -- our supply chain.

[indiscernible]

So Pizza Luau is probably the most expensive. So we sit below them. Pizza Hut and us, we sit -- depending on the size, right, so you don't -- we eat pizzas probably differently. We look at size, we look at this, we look at all sorts of things. We are inside of Pizza Hut. And Pizza Huts above us. That's how we see. And then you got the smaller chains which you've got varying degrees of differences throughout that. So if you take maybe down South Fukuoka, they've got a big brand there, which is big 35 stores, something like that. And they're probably priced about the same as ours has been, 10% more than us.

[indiscernible]

There's another thing that's hollowed out in the middle of the. When we arrived in Japan, about 97% of the business was delivery. And we went all the way to pre-COVID to about 50% carryout, carries a lower ticket average. So it was diluting the average ticket while growing the average customer count but then you have all the delivery costs in there as well. And then during COVID, there's been now a delivery percentage was it 60-40-ish something like that? 58%, 42%?

Yes, something around like that depending on the prefecture.

Delivery, it's 58, 60 delivery. So sort of gone there and then pivoted again. We were creating a lot of high -- well, not high street like Louis Vuitton but what we call high street, coming from the garage to the main strips. The other thing in fact here would be, we're lifting up our [indiscernible] sizes and we've peaked at that now, right? We're starting to think about it the other way.

Yes, definitely.

So we were going to 120, 140 square meter sites, 150 even bigger. And now what's -- what are we shooting for 100 square meters.

100, 120.

Yes. Now it's really [indiscernible] , the #1 reason you buy pizza is in the delivery, it's the nearest pizza shop to me. That's the first reason you buy from it. Now, it's got to be great price, it's got to be great service, it's got to be quickly dial it away. If you can't see where your pizza shop is, it's another dilution. So by having a profile site, it adds to delivery, not minus for delivery, but now we can do a high profile which is starting to trend back because we're not going to do as much carry out 5 years from now and 10 years from now, less maintenance, less operating cost.

What Martin is talking about is professionalizing the business in Taiwan, similar to what we're doing here. There's actually a lot of similarities, and that's got a lot to do with -- it's actually got a lot to do with the leadership that was here previously -- and what is the -- what was there as well. So Scott Oelkers who ran Domino's here, Scott Oelkers over there. And that's the way the business is built. Now that's not a bad thing by any stretch. It's just -- we're just going through the different motions but we draw those comparisons. So high price, lower volume for orders, that's what we were. What Martin is talking about now is, well, doing exactly what we're doing -- I talked about with looking at the barriers to entry, looking at all those things, what is the barbell? And I think that's part of your presentation, is it? As we sort of build that out and professionalize coupons, professionalize the menu offering, professionalize the stores and how they interact with customers.

Yes, it's correct. And one of the other outcomes of the CLT was Pizza Hut is the most innovative company in Taiwan. So I read again, Pizza Hut is the most innovative company in Taiwan. Okay, that's not good, right? Because Pizza isn't the best innovating company, it should change in the minds of the customers. So we need to say a well of our safe image, a safe brand that plays by the rules. And so we are, okay, what can we do just to get some rumor industries? And okay, we did some things. And the next slide will show you if my clicker works. Here it is. So we said, okay, let's start with no delivery fee. So no. So not decrease it, just say, no delivery -- so there was some famous franchisees with what happened if someone orders just a can of Coke and asks for delivery. So I would say, okay, if that happens, so if your minimum order amount is below x, we will compensate that. We did that for 2 months. We said we did it for 2 months. After 1 month, we evaluated, it was like 0.8 orders per store per week. We had the order lower than X, not only can of Coke, but it was lower than X. And they were telling us we are really happy with this because now there are less barriers for customers to order. We introduced a Mega week. The second picture here, the Mega week. It says 99 NTD, and it's roughly around, I think, AUD 5. It's EUR 3, so roughly around AUD 5. And we get a lot of press with this. They were saying, how are you doing this? Did you find oil, actually, there was a line in the press that said Domino's find oil because they can now afford to ask 99 NTD for a pizza. But we just do that for 1 week, right? We don't do it for every week. We do that like 4x per year. Pickup, very good pickup order just to get new customers in. Get the rumor in the street. We are here, 99 NTD for pizza. No restrictions, 99 for medium size. The only restriction is medium size, but you can order every flavor. And we also charge or start changing the menu. And what we did, we copied a lot from the Japan team which shows you here, we started with 1 kilogram pizza, a 1 kilogram cheese pizza, only for the 16-inch, so not for the 10-inch or the 12 inch, it's only for the 6 inch, but also start with Quattro. We had Quattro in Taiwan before. We still have it, but we introduced new ones, new and improved ones. Identically copied from Japan, what happens last week, 70% and of our pie mix last week, Quattro Pizza. That's a lot, 70%. So we are still looking, okay. What is a good thing? What is a bad thing, but the Quattro's introduction was good. We introduced lava cake, also egg tart is really popular in Taiwan. Actually, KFC is now opening a KFC in Taiwan only selling egg tarts. So KFC is famous for the chicken, right? They're not selling their chicken. They're only selling egg tarts and then the various varieties. But there are -- so that shows the popularity of egg tarts in Taiwan. Introducing some new drinks also copied from Japan. It's not going that well so far. So we need to evaluate are we going to stay with it, but -- and then some cheese sticks here also or you open the stick you get like a 1 when -- yes, 1, yes, cheese. And it's not performing that good. Let's see for the next few months, what it will do and we have to remove it or replace for someone else. But the big help was the Quattro and actually the egg tart. But also the BOGO delivery we got, we started it in April, just for the test, okay. All corporate stores are testing, some franchise stores we do -- if you order 2 Pizzas, you get 1 free. And they say, okay, why are we doing this? Because we are having 70% in the past carryout and 30% delivery, why should we do it? I said, okay, but we are a delivery company, so we should deliver to customers. And what also helped was that COVID hit Taiwan again. So currently, the COVID situation in Taiwan is there are 90,000 cases now every day versus 0 cases 2 months ago. So it rapidly increased. But it's the same what we see in other markets in the world. There's the Omicron, so there is less people in the hospitals. And luckily, the government is not the same as in China, which says, okay, let's reopen everything again, not all. So don't close the borders, for example, we're reopening the borders again. So hopefully, within July, August, there will be no quarantine for people who are entering in Taiwan again. So it helps us, of course, in delivery, but still a BOGO deal does also really help with that. The start of the app already launched before we acquired a market. It starts in July '21. We are now currently at 69% of our app sales -- our digital sales come through app. But if we compare it with other markets in DPE, it's like roughly around 80%. So we still have a lot of potential, and we need to evaluate or redevelop the app. We make it more -- we have to make it more user-friendly to get people more in, the conversion rate is not that good enough. So for sure, we need to work on it, but it still shows the improvement which we already made until now. First is, yes, but also versus the other markets where we are a little bit behind in those percentages.

[indiscernible] .

Not yet.

[indiscernible]

No. Same with the POS system, it's different from the other DPE markets. So we are going to change that within the next 12 to 18 months and then it gives us more data and more insights and it gives a lot of more insight of what we can do actually with the market. And then the ESG mission and goals. Also in Team Taiwan, we introduced it, and we introduced it a couple of months ago in March, actually. We started with Feed the Knead in July this year. And we start with schools. We start with -- and why is schools? Because all schools are closed at the moment or most of the schools are closed at the moment. So we give them a welcome back party. Okay. Schools are open again, give them some pizzas just to celebrate that the schools are open again. But also employee care. What does employee care means? We have now -- we started with a person in July, and their only responsibility is there, not only the physical health but also the mental health of the people in the office. So that person talks to everybody, okay, how can I -- so just talking to them on a weekly basis, give them the opportunity to talk to the person, what is going on? Where can I help you? Do you suffer some mental maybe a mental breakdown? But so how can we be sure that, that won't happen? So how can we be -- because a lot of people work from home with their children next to them. Yes, I know from my own experience, it's not very easy. So this person can help a lot, in my opinion. Eliminate plastics, we still use a lot of plastics in Taiwan, if you compare it to other markets. So we have some opportunities there, to communicate food safety on the website, but also the e-scooters. And what's the most important thing here is, I'm from Holland. And in Holland, everybody drives a bicycle. If you can't drive a bicycle, then you should be a foreigner because all Dutch people know how to drive a bicycle. It's very hard to get stores to get bicycle in the stores. There are parking spaces for scooters in Taiwan, where you can park your scooter but you are not allowed to park your bike in that area. So there are some areas now in Taipei, but also new Taipei city. They are creating bike path, et cetera, so that's easier for us to build a new store there and start with bicycles, but it's -- I thought it was easier to get bicycles in, but it's a little bit different, but I won't give up. So the last few slides, what's our goal and the future plans for sure to become the dominant #1. Well, I just start my presentation where we are now #2 and in some areas, even #3. So we are now working on that. Actually, I think Pizza Hut is now already for sale in Taiwan. So they are already fearing us. Hopefully, they will not be opening that much stores again. But yes, it's giving us an example of what's -- of how to become a dominant #1 there. Also digital and technology, which we just had an argument about, okay, if we can move over to the same platform as other DPE markets, we can use that. It's much easier and much user-friendly to use. Same with marketing. We made some greater investment through support from multiple markets. So we get the help, for example, from Todd Riley, who is also responsible for the APAC region. It helps us a lot there, but also more access to customers through our own channels, some data and insights. I think it's the same with digital and technology. When we roll out the platform, we get some more data. We get some more insights. And if we get some more insights, yes, then I think that can help us also a lot. And the investment, investing in growth is called, but we would like to invest in franchisees. So not only in franchises but also in potential franchisee. I think that's the word it should be investing in potential franchisees, getting people more on board for the next 5 to 10, maybe even 15 years. So what do we do? Test and learn. In this phase, we are still in a test and learn phase. So we relaunched the brand. We tested that for 7 months. At the end of April, we relaunched the brand again. So we are now from the old grandpa company transferring into the most futuristic, innovating company of Taiwan. The second phase will be integration and investment, and the third phase will be the growth and growth in stores will also grow in people and also growth in franchisees. And yes, that's, I think, gives us the good result in the end. So, how do we get there? High-volume mentality. I was talking about -- it starts with low volume mentality. It's not transferring to high-volume entirely. But also path of excellence, it's a global training platform, which we use, which we started using in other markets as well in the next few months. So new technology, but also customer lifetime value, CLV, strategic market change not only copying marketing items from other markets, but actually strategic marketing. Fortressing the market, I just had a slide next after this and motivated franchisees, of course, but I think motivated franchisees start with high-volume mentality, and they see that their EBITDA growth is growing. I think the franchisee is also always happy when their EBITDA is growing or maybe more important when their return on investment is going to decrease -- the amount of time is going to decrease. I think almost a similar slide as Josh showed of Japan. So the top 10% is actually doing an average of 30-minute delivery, and that's an average. So that means that there are stores that were delivery under 10. Some stores are allowed, but the average is 13.77, for the best top 10 performing stores. Just here, this is the island, Sangchong, Luzhou district. There are currently 6 stores in this area, and we started with 4, and those 4 stores were here in the bottom 10. We add 2 more stores here, and now they are here, Sangchong and Luzhou, they are now here, 60-minute average. So they come from 21 minutes average to 60 minutes average, right? That's really impressive. And to give you another example, we acquired a market, there was an average of 25 minutes delivery for the whole market. We are now roughly around 21 minutes, some weeks even below 20 minutes. Some means we are even a little bit higher than 21 minutes, but average now is 21 minutes. And we only change it with some mentality check, with some mentality. So we bring in some other mentality, which like to be part of the top 10 or the bottom 10 because you are now performing actually in the bottom 10, when you look to other markets. We changed that. Actually, my operations team changed that, and they did a really good job there. And I think this will be the last slide, actually. And it shows, okay, we started here with 156 stores in September '21. We are now here 167 stores, and growing. So what's the potential? 300, I don't know, 400, maybe even more, maybe not. But I think there are rumors or potential to double the market within the next few years. That's it.

What's your expectations when we get to October, once we finish cycling the rebasing, and given the cost of living pressures that the consumer is under. How confident are you that the same store sales can start to grow again?

So the question is that when the rebating rolls in September, how confident are you positive like-for-likes from October onwards, is that a question?

Correct.

Considering all of the inflation in the world and that sort of stuff?

Yes. Well, that's the question. Look, we feel confident. We look at this every day. This is not something that's creeping up on us. So we're -- in my head -- it's already there. My head is at Christmas, my heads. We're planning each step of the way. So fairly confident we're going to roll okay. Bit of an ambiguous question because we've got everything in place, and we don't have those costs. So I talked about the costs that we had in the business. They were wound out at Christmas time, right? So we thought it was going to be a V-shape recovery. It wasn't. It rebased. Those costs are gone. So rolling on top of those is going to be better than last year.

So we also -- we monitor the 2- and 3-year compounding trends and where did the rebasing hit and where do you come out against those trends with the question mark of what happens with inflation against costs and so on. But that trend line looks like it's in the right place, but what will happen as you take prices up a little bit more and so on.

Sure. And then second question, in terms of meal as a task and the pizza rice bowl, what proportion of orders now would have one of them in it? Just trying to get a sense of how big is it at the moment?

Yes. I mean that would have a pizza rice bowl or be rice bowl by itself?

Either by itself or as part of a bigger order?

Depending on where it is, 5% to 8%.

And what does success look like? Where do you want that to get

Well, I think success looks like a range of options down that level. I don't look at Pizza Rice Bowl as the one and done going to change the world with meal as a task. As I said, there's no silver bullet. We don't just go, we've got a pizza rice bowl. You've got to build out that category -- and then you've got to find a way to then track those customers through, so they buy pizza in other occasions for you. So it's not just 1 transaction, and this is something we're trying to get through our whole business is that we used to be transactional thinking. That's what everyone's head goes through. How many did you sell that -- we've got to look at the customer through the journey of our interactions with the brand, and that's really the more important step about meal as a task.

And then last question, then I'll pass on. Slide 55, there was something about the improvement in delivery costs. Can you talk to us about what's the key reasons for -- what's the biggest? Is it fortressing? Is it efficient vehicles? What proportion is the biggest and the second and the third, and just talk through which is having the biggest impact?

Yes, it's a good question. And this is something we think about just about every day, and this is a Project 3TEN is for us. So it's obviously, it's fortressing is one of the big things that we can do. The other one is e-bikes, especially in highly dense areas in Tokyo, an e-bike can go anywhere. And e-bike can park outside someone's apartment as opposed to a car that's got to go down the same way street, bikes can go the other way. So that's the other thing. And what we didn't put in these numbers is that Tokyo, when we started this journey to e-bike, and maybe Kakiuchi-san will be able to talk to you about this when you see it. But we've got around 55% e-bikes in Tokyo. Yes. So and then 30% across the whole of Japan.

[indiscernible]

Just trying to get a sense of the magnitude. Number one, it's the size of the territory. And it's fortressing a generic word because sometimes, like I was trying to give that analogy of [indiscernible] , sometimes we're just even trimming an area, and there's no store to cover that area yet. So it's a -- using the same language -- for a rebasing of that area. It's a resizing of that area, and it doesn't always translate into a new store yet. Sometimes you cut it off early.

There's -- when we look at our heavy users, medium users. We can provide better service, better quality in those areas and then that moves them up the frequency cycle, right? That's what you want to do. As soon as you go and do a delivery that's well beyond what that costs, you might think about that's a win because you get a sale. But you are actually saying to all the customers in that golden mile or that area at the is that they're not as important, and you actually make more money out of those people there because you do get all the different occasions. That CLV or the customer lifetime value, those people there is a higher, highly profitable as well. Those are ones that you've got to go all the way, they're not as profitable.

So here's on the characteristics of a heavy user across our whole business in every single one of the 10 markets, they run a lower ticket average yet they make you more money because they spend more frequently with you. They have a higher Net Promoter Score. They're more likely got a single delivery, and they more likely got a smaller, a faster delivery. Now if you put all that together, because sometimes it can see that there's conflicting things here, they're more likely to be closer to the store. Because the closer you are to the store, the more likely you got a single, the more likely you've got a faster delivery, which led to a higher Promoter Score. -- which then got you a Domino's fan, you started looking more at our coupon, so you bought more often off that value and then you spend a lot more with us. So you got into the Domino's dream. So they're all interconnected. So these customers that are outliers, they're harder to make into a more loyalist consumer because it all starts. We probably didn't get to them fast enough. We probably didn't do a single delivery. It was a second sometimes, and Net Promoter Score was worse. They didn't get into our value proposition. And so they paid more and got worse service versus a heavy user who paid less and got better service because they were closer to the store. Does that ring a bit? The immense amount of data that we can continue to correlate this down, and we can also show the closer we get to you, the higher you'll get -- you'll become more frequent, as we just get faster and faster to you. So that's why we're motivated by this size of delivery area.

Just looking at your maps around where you're well penetrated in Japan and where the gaps are, just trying to reconcile why you're not as effective in some areas and you're much more in others? Obviously, your store distribution would explain a lot of that. But I'm interesting what the constraints are. Is it a cultural constraint around pizza? Is it a constrain around a number of franchisees, obviously you're getting on more multi franchisees, but can you knock it more new franchisees in the system? What is holding you back in some of those areas. I'm sure it's not capital. I'm just trying to understand that driver.

It's a good question. So I think we got 47 different prefectures, 47 different TV markets, so we will leave it like that. So this is why I said, scale matters. And you got to think about scale on a prefectural basis. So we talked -- we got that slide in there that we're only in 17 prefectures in 2013. Now, we're going to actually build out in each one of those prefectures to get that scale. What's holding us back? We obviously need more franchisees. We've been growing rapidly. We have been opening through corporate. So if you look at [indiscernible] for an example, 22 stores, we've got a mix of corporate and franchise. We put corporate in there to lead, to produce managers and then it just takes some time to keep to roll off those managers into either new stores as they become franchisees or we open more corporate as those people become, but you can't raise people up that curve. You need managers to build. You want to build them properly, incubate them. It was on Don's chart, so you got to incubate them and then grow. We've got 367 new store managers as well in our business. So think about that. And then they'll start producing and then the cycle continues. But we've got a much broader base now.

And part of this is history. So Josh shared it earlier, we started in Tokyo, we got to Osaka. Our whole cost base was built like that. If you've seen previous presentations, Josh has given, he talked about how we broke the back, we went to a national ingredient price in the first year of COVID. We introduced back of the house dough . Both those 2 things made the regions now successful because our cost base came out of Tokyo, the irony is the cost of living is lower in those regions, but we were driving a higher cost to them because the factories were all in the bigger cities, taking the ingredient out. We decoupled that by going one national ingredient price, which meant that our corporate stores in Tokyo and Osaka went up as they went down to get to a better price, reduce it lower. And then because we hadn't been there for that long, regional players have filled the gap where Domino's hadn't been. So now we're going in underpenetrated and building it back up. Whereas in these other places, we've been there 30, 40 years.

And you got to remember like just relocating some from Tokyo to one of these far-flung areas. I mean, you can't do that in every case. So you're going to start with that core, build from there and build out. It's like if someone said to you, you go to [indiscernible] it's going to be a great place. It's very hard to make that decision, right? So what we do is we put people there. We start building the business through corporate then we off-flow to franchise and recycle.

Okay. And then just -- you talked about growing the pizza category with your still roll out, maybe I missed it. But I didn't see much on sort of the elements within QSR more broadly and how things have changed [indiscernible]. How do you think pizza is going in aggregate in Japan and Taiwan, I guess?

Yes. Well, you can see it's growing. I mean just looking at our chart alone shows it is growing. We do compare ourselves to sort of size of the QSR market. And then we also compare ourselves to size of delivery as well. Both of those, we are small in -- and that provides the inspiration for us to know that there's a path forward here. So it's about share of stomach, right? It's about those occasions. It's about barbell strategy to unlock those occasions, that's where it's at for us. And we think there's a long road there.

Just on franchisees, I'm talking about Japan here. Just the willingness to grow. If you can just talk about that a little bit, just the percentage of franchisees that are actually prepared to grow. And I think you might refer to that as unique grows. And then just following up, maybe if you can just talk about -- you've mentioned the training of the new managers, the training of these franchisees. I think I understand you're on Mammoth too. You're not actually using pathway to excellence. So just what do you think that actually means as you transition to the new training platform?

Yes, so the first question is the franchisees wanting to grow. Well, what I can say is it's been a record year of franchisees going into franchise. So I mean that certainly gives us a good a good idea of how they're feeling about the business and what they want to do. As I said, 15 -- we've grown annually 15%. They've grown their network by 18%. [indiscernible] is here as well and he's going to be talking to you about how he's growing his business. So make sure you get a chance to talk to how he's feeling about that. In terms of path to excellence, in some respects, I think path to excellence, the idea was really generated out of Japan. We saw -- and this is all the work that Kakiuchi-San did and Scott Oelkers, these guys dreamed it up. These are all the great things in our business. So -- and we think about Mammoth. So Mammoth for everyone in the room was our original training program. It had a number of steps, and we could prove that as people went through the steps, we're not only do we get the retention factors, but we actually get higher sales, higher NPS, higher everything as people went through the steps. Mammoth 2.0 is the step between path to excellence and Mammoth 1.0. So Mammoth 2.0 is we're on the same backbone as path to excellence. So Adobe Captivate, which is the platform behind it. We are then transitioning our content from -- to a global because when you look at it, our business is 80% to 90% the same regardless of where you are in the world. All the training is very, very similar. We like to think there's all these differences. There's actually not, and we're going to be building that content out. But there's still opportunity to create content within each market. So if you're making certain types of pizzas. So it is just a step between, we plan to launch path to excellence this side of Christmas, it might even go a little bit beyond that, just because Christmas is such an important period for us, but that's when everyone gets on the same platform. And that's actually when all the markets start leveraging content around the world, and it's really exciting for us. And then we can prove that the content is having an impact on the business, NPS, path to franchisee. We're going to be able to tell, standing back how many people are store-ready or manager-ready, how many people are franchisee ready and that will create the confidence in the pipeline for us to say, here's how many stores we're going to build this year, right? Because you can see it, you've got them. They're all trained. They're ready to go, and then we can just prove out the other paths as well.

Just before moving on from that point, Josh, is obviously talking about the importance of Path To Excellence. [indiscernible] recognize the importance of Path To Excellence to the future, you just appointed a person to the global leadership team. Maybe if you could talk a little bit about the color around how important you think it is?

Yes. So just joining those 2 dots, exactly what Josh said is that Mammoth was an inspiration because it was -- we could watch in Japan, the Mammoth team members that were coming through Mammoth, which was on their phones, building their avatar and the more trained the team member was, the better the store performed. So that was really exciting. Separate to that, we always had a manual version called the Path to Excellence. And the manual version is just now to make sure we've got global content is merged in with using that avatar mentality and building the person -- the individual team member up on this whole journey. So, you're merging the content with a Mammoth mindset. What Path to Excellence brings that isn't in Mammoth or in the old Path to Excellence is the third engine, that's still under construction. What the third engine is AI. And what it does is it starts to say how effective is your training? Because right now, sometimes training is entertaining. Sometimes training has different standards, right? Someone's marking the test easier than the other person. By going through a global platform, we make sure everybody goes through at least the bare minimum, different countries will add different bolt-ons, but there's classes called high-volume mentality, excellence is expected, driver challenge and these sort of classes. As a minimum, everybody in the whole organization sees that. Then we look on the side and say, well, how can the German classes are getting a better outcome? Why is the Japanese class getting a better outcome? What is the characteristics in the way that class is being taught, we can bring it back in? The other thing it does is it says, what is the characteristic of a team member who starts here and becomes a franchisee as we monitor? What's the characteristic of a team member like this that becomes a manager? So we start building up this third engine we've never had before, which is starting to look at all the data and watching people go through it, and then how do they perform. We think that's where the secret sauce is beyond the team member controlling the path. It's such a significant platform. We're nearly at 100,000 team members, one day wanting to be over 200,000 team members, is that Matt Kershaw who set up the Path For Excellence has now become a global team member because so we can make sure this engine is so significant is right across the globe. He also has a second role, which is OKR, so people that use OKR mentality, Silicon Valley mentality, working on 90-day objective and key results to run an organization. I won't go into all the detail about that. But the company is shifting into an OKR mentality so that because we now live in a hybrid world, we are in off-line. Then we -- sorry, we were in the office, we went offline and now we're in hybrid. We spun up in the beginning of this year, Michael Gillespie's team to say how does the future of work look like? So we started meeting with different businesses in Silicon Valley, having a look at how Google runs, Intel runs, Microsoft and a few of these businesses. We stumbled across a software called Workboard, it's brand new. And Workboard means that soon, everybody in the organization can see my objectives, my key results and how I'm performing every 90 days, and I can see theirs. It's such a big program to keep people fed into this, Matt has that as well. Sorry if I branch out too much, but it created a whole people and learning, driven in a -- how do you keep running in this new hybrid world, right? I mean every company is trying to deal with this where people are displaced for a lot of the time. And we think between path to excellence and the OKR, which I could explain a lot more about in person, it's going to really change the performance of the organization to another level.

I don't know if this is on because I can't hear anything. Thank you all for your time and for introducing us to so many things. I appreciate this. I really wanted to kind of drill into the Japan business a bit more. You had 2,000 stores as a goal to reach. Do you have any clarity on when you'll reach that or what -- how many stores per year you're thinking of? I think pre-COVID, it was like 30 to 70 a year or something like that and then it accelerated, do you go back to pre-COVID levels of store growth? I just wonder if you could talk a bit about that goal.

Yes. Well, we talked about 2032, that's what we tell the market. I mean obviously, we've got internal goals that we'll want to get us their earlier, that's natural with that sort of business. The thing you got to think about is that every time we grow, we have a larger base to grow off. So when you think about the numbers of 30s, 40s and 50s, that was off sort of older thinking, we brought that forward. So we don't think it's going to -- we think we're going to keep growing this year. We're going to be -- got to make sure we grow where we don't hurt ourselves. We're going to make sure it's the right type of growth, but I'm not scared by the numbers that we're sort of doing now. Depending on where they land, we've got to have the sights to go after. We've got to the franchisees, and that's the important part. So when we tie that back into path to excellence and things like that, we're going to have good visibility on how we're going to do that. And that's actually an important part of this whole -- of our whole strategy going forward. So, we're still going to get to #1 in all the prefectures as well, we've got a long way to go. We're not there yet. So you're going to see a lot more sort of balanced growth across those prefectures going forward as well. So I can't put a number to it, but I don't think it's too. I think that's appropriate numbers; 2032, but we plan to be much faster than that.

Are there regions that you're going to focus on? Do you have a particular targets?

This is actually -- it's a bit more science than it's a lot of science versus art. TV is a massive driver for us in Japan, and it's 47 different TV markets, right? So we actually have -- and Ben can attest to this as well. When we look at all the stores we want to build, we talk about unlocking more TV. We talk how do we get to 52 weeks of TV. How do we get to -- if they're on Tier 3 TV, how do we get to Tier 2. And these are all targets for us. And then the team goes out and says, "Well, how do we find sites for those." The other good thing that we're doing with the development team is we're going further out because we're orientating the team even further out. So we're looking for new developments that we can go into. So we've got pipeline even 18 months from now that we can see, that's another nice thing to have when you start orientating the team differently. And one part of the team will run this way, and the other part will run more, how do we open stores in the next 3 to 6 months. So it's a nice little add for us, but we do look at prefecture, remember scale matters. Think about 47 different New Zealand that we're going to get to scale up, it's quite...

I want to understand the procurement and logistics a bit better because I think that's probably the back office, so to speak, of what you're doing. Is that -- so you have a hybrid model where it's partly outsourced and partly in-house? Can you talk about how that works and kind of what -- is there a breakdown you can give on those 2 outsourcing and in-house and why you do it that way?

Sure. So cost is a big thing. To unlock all the other prefectures, we realized that there was a massive cost in the supply chain. We realized that 60% of your truck is full of dough trays that you have to transport out at potentially doors opening on the back of the truck, closing again, and then opening it again and then quality degraded over time. And the cost is just too high, like franchise P&Ls and even our P&L's, corporate P&Ls, just couldn't sustain it. So we have to go back to house. So that -- there's not a lot of magic in making dough. I think Jesus fed 5,000 people with bread at some stage. So there's not in that, so we sort of broke down that paradigm in our business that you can do it, you can do it. And that's what we've been doing. So I mean opening more away from Tokyo as a center because we've got a dough facility here, right? That opened up Hokkaido, that opened up all the other regions. And then we swapped the corporate stores that we had and the franchise stores over to back of house dough manufacturing, which meant you send a bag of premix. They have to set up with a dough mixers and some trays, but that was it, that's about as hard as it got. And then with our expertise that we have in Australia, we could actually do that quite easily. We have got -- then the other part of the model is the fresh dough, the chilled dough that comes out of a number of different plants. So we've got a plant down in Fukuoka. We had an Okinawa plant. We now service that out of another plant now, and we've got to Tokyo and Osaka commissary, and that's a chilled component. So that then goes with the dough trays and then goes down the line where we needed to go. So that's a different hybrid model. It is third-party manufacturing, we don't own those assets. So -- and it is cross-docked. So it's not a truck on directly out of the facility. It goes to another facility, that then goes from a -- basically a DC that assembles an order for a store and then goes out to store on a route. So, very similar to the rest of the way the Domino's works.

It's like a 50-50 or what -- because there...

250, 300 stores that are back of house.

A part of this is growing from a history so that when thinking about Tokyo, Osaka business, the original founder of this company, a family went and set up a dough business, which then supplies a lot of other businesses. So we were leveraging that scale when we were a certain scale. And then that wasn't effective into the regions, as Josh said. So we're sort of in this paradigm right now. As you head out to 2,000 stores, we keep evaluating and saying what does that look like? So the -- it may reshape itself in the future. But right now, it's partly history that puts us here, whereas all of Australia and New Zealand and Germany is back a house in Denmark. All of France, Belgium is commissaries. Japan is the one big -- and it's all to do with history. Partly, too. You remember, we bought a business we said would be 600 stores. And it changed so quickly with long contracts in the family business that produce the dough ball for us, if that makes sense, then we overshot their curve as well. So the other reason we go back of house is they couldn't even keep up with our volume here.

And there's another factor of this slide, and we have spoken about this before, but I want to -- this is an earthquake region. When you have 1 facility or 2 facilities supplying your whole business, you start getting pretty worried. Like I said, I'd like to sleep at night. Back of house dough actually helps us. So we don't have the chart. So Tsunami hits, hopefully, it never happens again, couldn't supply. What if it breaks the factory? What do we do then? That's a problem, right? We're in the business of staying in business. It's always a good rule. So back of house can offer that in those regions. So that's the other reason we do.

Are the economics different with back of house, so the margin is different. How does that affect the business?

They are a component at a store but they're actually better.

Slightly better.

Slightly better.

It's a more complicated store to run because you're now getting dough into the business. But the outcome on average, most identical to the customer, customers see a double ball come in and trade at the front and we stretch it into a pizza.

A slightly better margin, but there's more labor costs involved.

No, even with the labor, there's a slightly different margin.

After all the equipment after in, it's a little bit more profitable, but it is more complicated. You're bringing more variability into your business for that saving.

I'm sorry. One more question, and I'll pass the mic, the mute mic. I wanted to understand how the reopening is affecting store economics, and you had the rebasing chart, right? Do I understand from that per store sales fell, and you're expecting a V recovery, but that the rebound didn't happen. So what's happening? Like where are we now in that picture? Are we -- what's going on at this point?

Well, as I said in the presentation, where sales and profits are higher than pre-COVID. That's how we think about it. It did rebase. It went from here and went to here. And then we had to unwind all the costs in our business. And then we had to find a way.

So you lost that solo dinner, is that the idea?

Pick up customer.

That was a carryout ...

1,000 yen customer, 1,200 yen.

That was a carryout customer that you lost that with the reopening, but the rest of it is sticking, is that essentially where we're at? Okay.

Think about everything opened up at that one point, every single option. Everything was sort of half open, periods of quiet, like it was everything just went bang and then money redistributed. Beef bowl places, all these places were getting frequented. Workplaces started to fill up again slowly, not at the same levels, but then that displaces people on trains, going to work and then changes the way they're eating patterns that happen.

Just in terms of Taiwan, maybe, Martin, if you think about what Don was saying, I think 600 to 800 stores, Japan was market share gains only. So is 400 stores, the ambition, the milestone is that market share gains? Or is that growing the category?

Yes, I think it's a growing -- sorry, it's growing.

Unless Pizza Hut is wrong or somebody else is wrong . Because remember in Japan, the pizza category, if we pull that graph back up was pretty flat. If we assume the others don't shrink, it would be game. If they shrunk, then you wouldn't be growing the market, right? You're just knocking a player out each time. The benefit of Taiwan, it's got all this learning from Japan. What we said in February, Taiwan was the highest performing business in our company because it was able to put the learnings from Japan straight in and accelerated really quickly. We didn't have that benefit when we came to Japan, we were discovering.

So there's a lot of leverage there for marketing. Like think of it this way as well, McDonald's uses the same marketing as Japan -- sorry, in Taiwan as Japan. They just voiceover different, predominantly, not everything. We can do the same. And there's a real love in Taiwan for Japan. So there's a bit of leverage to be had in marketing assets, some of the ways we market. I mean, look at Quattro, which is what Martin is saying, that's one way. We've got a lot of expertise in that. And by the way, that drives the trial because remember, it's a higher-priced product. It's too risky for an average consumer to go and buy pizza. So we're now breaking that all part, barbell strategy, occasions, how do we answer all the little parts of that, get them through into the business, get them into our ecosystem and then start marketing to them and then take them up the frequency funnel.

And is Taiwan higher, lower, or in line with Japan margins? Just -- I don't want a number. I was curious around should we anticipate when we think about...

From the company level or store level?

From the companies, and we're trying to estimate Asia so to speak.

Pretty similar.

That is sort of fine. And can you maybe just sort of just talk about Japan payback, where it was for franchisees maybe on a pre-COVID, where it got to during the sort of enjoyment, that phase? And then kind of where do you think it gets to. But DPZ have got an ambition for paybacks below 2.5 years.

So 3 is the world target now. 3 years.

Okay, 3 years. But Japan, I understand was never near it. Where can it get to, given the changes that you're making, please?

The biggest thing Japan has the shift is its total advertising spend. Japan is an outlier and Taiwan -- particularly Japan, on the global scale. So the percentage of advertising in Japan is materially higher than the markets that we're familiar with. And that comes with leverage and scale, potentially.

So much the reason we've got to get more stores, get that scale in each market.

Most of DPE, the total advertising cost of the business is between 6% and 7%. Japan is still between 11% and 12%-ish. Franchisee sometimes lower, right? Between 10% and 12% is probably a better average. That's a lot of bottom line margin. There's at least 5% there, long-term scale passing that back through. Hopefully.

Paybacks, maybe where they were and where they got to. I was just curious. Thoughts on what you can say on that.

Well, they went out as far as 7x at one point in the history...

Yes, we'll range it for at least 4x to 6x.

That's the aspiration you think you can get to?

No.

That's where it is now.

Aspiration is always better.

Counter that [indiscernible] is that 4 could also include a period pre-September '21. That's where we thought your profitability should actually be amazing during that time, payback should have gotten a lot lower, artificially or [indiscernible].

Yes, there was periods there where you were definitely down in the 4.

Yes, we had stores down even lower than that. But average is -- as an average.

One of the challenges for Japan still is the recovery of a new store to build to scale takes a lot longer than every other market because of the purchase cycle. Even though it's improved a fair amount, when you split a store in Japan, it takes almost twice as long as a store in Europe or Australia to recover. Typically, a store in Australia or Europe would recover within 18 months to 3 years. And here, it might be more like 3 to 5 years.

Bigger market -- bigger markets, different sizes and...

Should we get this food before I get cold? Nathan is eating it anyway, but you guys were all standing here since we flew in last night and...

Can you talk about the availability of credit for your franchisees in terms of...

That hasn't been -- if anything, we're getting into micro stuff, but that is not an issue for us today. Availability of capital -- and some of the more bigger picture scenarios, not a change for us today.

[indiscernible] question, but how much visibility do you have on your top line and [indiscernible] pretty well publicized [indiscernible] ovens and building all that kind of stuff. So consent is hypothetically if there were delays or [indiscernible] does that push out the visibility you guys have got in part terms of your pipeline of new stores...

I can do. So it might be that there's a franchisee that was 9 months down the pipeline and they decided that they were going to stall and move. So that is because of the current environment, I'm going to wait another 3 or 6 months. And that could be then a lost opportunity 9 to 12 months from now. It's very rare someone's going to pull out of one that's already in construction or underway because it's already committed. But it can have a longer term, people might get more conservative.

Your visibility of short maintenance [indiscernible]

That's a good question.

[indiscernible] sounds quite as the uncertainty and volatility is that maybe bit more cautious around committing for something 6 or 12 months out? Or are they saying, well look, we've seen there's a 35% lift in profitability per franchisee in Japan, bang, we're still happy, we'll commit this in -- pull by 2 months out, previously where we might not have done that?

And mostly, it's Europe, but there is more conservatism in the longer pipeline.

We try to sort of -- so that's part of their job, right, is to shore up the pipeline and make people to still stay the way of franchisees. We're sorting these things out. Here's what's going on. This is why you should invest now. This is the market share opportunity. That's how we think about the business. So it's a bit of convincing because we're all humans, right? We all go, the war in the Ukraine, what's going on. So just think it from that point of view. And then we would come in and say, well, let's look at why we should do this right now as opposed to why we shouldn't. Because quite often, you find yourself in these situations where the whole world is going through this and everyone want to feel safe. But we don't think like that, we go how do we manufacture profit? We talked about it. How do we get to that point where we can still be profitable, gain market share, not do what the competitors are going to do, like not open the stores. Look at the numbers through COVID, no one opened any new stores. We opened because we thought differently. So that's what we -- and we try to shore up that pipeline for franchisees as well, and that can be done through contracting, that could be done through a range of different things. So hedging of currency in some situations as it comes to Japan.

I'll phrase this question in a different way. Previously, we talked about France, for example, because it's got a longer period to get gas and electricity and everything else connected, that sometimes gives us then the confidence when we say, well, we know what it's like because we know the kind of point that people are locked into the pipeline for lack of a better word. And I think Ben's maybe asking here is if ovens suddenly became a longer lead time period, would that give us more confidence?

We don't have a -- lot of that sort of stuff as much as it's challenging, that's not the barrier. It's been challenging. Like we've been -- amount of different oven contractors and finding solutions and getting approvals for different oven, but we still got there. So that's not really what's holding us back in any way. In any window of time, sometimes a franchise owner may want a role for 30, 60 days through the next wave of inflation before than they push that button on that one. So it could push it out 1 month or 2 months. But you've already seen, like we had really significant inflation in January. And you're going to see by the end of June, we've opened a good number of stores.

You said in January as a result [indiscernible]

Say that again.

[indiscernible]

Correct. That was in that window of time. Yes. And then now we're -- typically for us, because most of our contracts are 6 and 12 months, it's July, January, July, January. The separate things to that are things like energy contracts, because franchisees sign their own new contracts, and that's whenever they come due. There may be other wage impact. So like for example, in Australia, 1st of July is a wage impact. But in Germany, it's spreading out all the way to October. They've got different -- so they're not in the same windows. So we've got to be careful to be generic. But by and large, the biggest increases are typically in July and January.

[indiscernible].

No. So the web has, but the new -- the app is running about 6 to 8 weeks behind at the moment.

In terms of rolling out that [ tech stack ] into -- obviously, Taiwan is going to be a little bit later. Japan, does that come on -- notice there's a language difference? Because it sounds like it's quite -- obviously you're consolidating too in Australia there's probably a bit more collection. Does that get rolled out globally pretty quickly or is that Australian first and then you...

Yes. So Australia and New Zealand and some of the smaller parts of Europe roll first and then it back ends quickly. But Japan is by far the longest. Japan is typically out by 3 months, 4 months from the rest of the business.

[indiscernible] on the point you made about advertising and the margin opportunity there as that normalizes, the 5 percentage points or so, I think in theory, you mentioned. How much of that is a scale game? And how much of it is rates in Japan for advertising is higher than maybe Australia? And is TV the only primary market for advertiser? I would have thought you'd be in all sort of channels. But you keep referencing TV market. So I just want to understand...

It's still a big driver. So when we do media mix modeling, it's still one of the biggest drivers in Japan. People are still sitting and in the world. It doesn't go away, like -- so we're in every channel you can think of. But TV is still the biggest driver and is the over -- that's where most of the money goes.

Right. And the rate per ad in Japan is not much different to what it would be in other markets relative to size...

I don't have those numbers.

But when Don, you mentioned it's a scale game rather than a rate game.

It's more expensive in Europe because you've got to buy the whole country. Japan looks more like Australia, New Zealand where you buy it by market.

Depending -- yes, different types or different GRPs at different prices, depending on different prefectures and depending on who's in the advertising pools, right? So you could find a really cheap ad in Okinawa for prime time, but that same prime time here in Tokyo is -- so 47 different markets.

The other thing is if we were coming -- if I look at the rest of our business, what Japan has as an advantage compared to France, Germany, even the Netherlands, is that those other businesses have worked all the way and they're not as dense in the big city. Sydney sent Australia broke before we bought it 3 times because the Americans came in, set up Sydney and they kept blinking, never got to the right scale to buy Sydney television market because they bled themselves to death. It's really ironic, but the founder of the Japanese business started in Tokyo and built a really strong Tokyo business and now filtering out it's actually a little easier than the other way around. If we were coming towards Tokyo and going, we've got to run at 30 million people, how many shops is that going to take? And how much are we going to -- because no one's heard of you because you've been in television everywhere else, and now you got to build scale in Tokyo. That would be really, really hard because we talk about that in Paris. We talk about that in Amsterdam. We talk about that in Copenhagen, even Sydney. Sydney is still one of the more challenging because it's the density and the size for the eyeballs.

Yes. No, it makes sense. Final one for me, just a one on cost is rent. I mean you mentioned that COVID was an opportunity to roll out stores at a good price in areas you couldn't get into before. Has rent kind of normalized now, do you think? Or is it still a pretty good environment to be picking up new stores at pretty good rents in Japan, for example?

Yes, well, it's pretty flat. I mean, it depends on where you are. Obviously, there's some landlords wanting to get claw back some profit or some lost rent. We did a really good job of through COVID going and talking to landlords and saying, we need reductions and things like that. And we rebased some of our rents in some of these areas as well. Then when we went into the new sites that was at a lower level as well for some of them. Some of them were amazing sites that we were just thankful to get. So I think you just got to go into a bit of a normal cycle now, if anything. I don't think it will be anything -- I don't think it will be like that. I just think it's going to be normal, which is pretty flat generally.

The question at the other end of this is that does this have a COVID-2 effect in -- some of the smaller chains not do as well during this inflation environment. Some of the less sophisticated businesses just would love Domino's to go away so they can just match the inflation to price, right? If food inflation is up 30%, just pass on 30%. That's what they'd love, right? And Domino's seems to be this pane because it doesn't do that. That's because Domino's doesn't just do that, it's looking at its delivery cost, it's looking at its leverage and its marketing. It's looking at how it's doing more for more and stuff like that. So do some of those other businesses blink and just go, it's just too hard. Like how do I get through to the other side of this because I can't pass all this through? But it's part of the prize in the back of your mind saying, if we're really pushing here, will we get some more of that? I don't know that yet because that hasn't happened yet, but that's what we like to think about. But yes, Matt, like you were saying before, when Pizza Hut would say Domino's keeps the prices lower, not really, you're just wanting to pass on your inefficiencies. The store that delivers to me from Pizza Hut in Brisbane, we've got 2 stores in between that. You've got to try through 2 more stores area to get to me. That's a lot of cost that you've got to pass on to the customer, which where you're leveraging that to.

[indiscernible] about store growth. In the first half, you open 10% in May. What was special about that time? Because even your run rate, you've grown well in the second half.

You're talking about Japan?

Yes, Japan. You you've grown well in the second half, but you slowed from that [indiscernible].

We try to [ up it ] before Christmas.

Okay, so then we should think about a bit of seasonality.

Run into Christmas.

Run into Christmas. I think we had all that catch -- that money we can capture, the market share. We try to ramp up towards that. And then it happens in June as well. We're going to have more stores to open.

But also, Japan was actually quite a -- I thought where as other markets are very June, December.

We still do.

I thought Japan was quite a regimen in terms of more regular. Like I'm just trying to square that with the comments made.

Yes. But it also still has a slight skew towards June as well. Just because -- and that's probably more us. But then when I look at the pipeline past that, I mean, it's still okay as well, right? It's -- we opened quite a lot of stores in June last year.

And you'll see Australia will be heavier June and December because state of origins and all the winter months. But Europe is the other way around, a lot of franchisees don't want to open into summer because summer is quiet. So open a brand-new store and go through the 3 quite months of the year. So we'll still do well, but it's much better ramping into Christmas. Like it's probably a Northern Hemisphere versus Southern Hemisphere because it is a franchisee sitting there going, wow, I'm going to get my store open in June and then July, August, September are the 3 quietest months of the year.

So why is June big in Japan?

From store opening?

Yes.

Just the way they fall. It's really -- it's not by any particular...

It's our financial year too pressuring a bit.

It's a lot of our financial year, and then we keep rolling. We don't -- last year, we opened a lot of stores in June. And it's just things pushing out, pushing out and then people like Ben and I and [ Craig and Uschi ] started going and say no, no, no open. Open when you said you were going to open. And then it just rolls through. But we had a really good first quarter last year as well. For us, it actually doesn't matter that much. So we will just keep rolling. And as John said, we ramp up pretty hard towards Christmas as well. We'll just get those openings in.

Some of these people are getting bonuses based on their full year -- you know those last few -- there's a little bit of that.

With OKRs, I think we've talked about it briefly. I think that will change and some of the other things that we're doing. So you'll see improve it at least.

Talking a bit about, you gave an explicitly point about, but do you think you've gained share in QSR and in order delivery over the last sort of [indiscernible]. Do you think that was a picture of...

Not of broader delivery because delivery has accelerated faster than we did. If you had a look at that graph, if you look at the world of APAC and Europe, delivery has grown faster than we've grown.

And the reason we didn't show that because we've got to be a -- put the-- we can't -- where we get those numbers from is there's sort of piece together there with you as well. It's just not something we'd put on the [indiscernible]. But we think that size of the delivery market has -- its big.

You have -- do you think you have grown within the QSR?

In QSR? Yes.

I'm trying to understand the post-COVID chart about how stores were stronger post-COVID?

We just had this question. So this one, I think we'd probably do that -- if we had to do this again, we would split that in half. And they're not -- they're sort of by themselves.

So I'm trying to get the 10% sales and 35% profit. And that's yes, that's right with that volume line that you just...

Does that make sense now?

Is there a way to understand that? Or kind of what's -- are you -- is there a greater leveraging per sales dollar? I'm just trying to figure out what's going on there.

They're not the same cohort.

[indiscernible] So on the left-hand side those 2 ones related to sales -- average sales and average [indiscernible] average sales in the entire country. On one hand side [indiscernible] by the same period franchisee [indiscernible]. Should put a line down the middle [indiscernible] the entire system and the right-hand side [indiscernible] franchisees.

Have the margins gone up, though, just in general? I mean even separating those 2 numbers apart, just as a broader point. Are the margins higher per store now kind of versus pre-COVID.

We're looking at different periods. So during COVID, absolutely, much higher. Even now higher than pre-COVID, but lower than during COVID.

What's changed? Like if you look at pre-COVID now, like why are the margins higher?

We're doing more orders, volume and your marketing costs are down just a little bit, not enough yet, but they're down.

So just economy of scale kind of.

Yes. And franchisees are running their marketing more efficiently than we are as well at corporate stores. So they're running a lower overall advertising cost and an overall lower labor cost. We're carrying more people in our corporate stores to build for more stores.

And the corporate stores are to train managers. Is that the idea? Or you're trying to build up like a -- is that part of this...

It's one part of it. That's a pretty important part. We know one of the things when we bought the business was the tenure of the manager and we know in our business that the #1 driver of value and profit, which is what we're really saying is the manager. So we spend quite a bit of time getting that manager right. And we're going to keep spending in this area.

What it's going to look like initially, a lot of corporate stores, and over time, you're shifting to franchisees and by the end of the process it's a 100% franchisee [indiscernible] profits or?

No, it's not 100%. It won't be 100%.

So what we do is we look at our -- where it makes sense for us to grow, where our overall structure is giving leverage and then we grow in those areas. And where it doesn't make sense, we might franchise those out. That's how it works. So I don't see a corporate system that goes back to 0. It's too important for us to keep.

And the other thing is it's such a high-performing corporate team. Like when you build an engine -- this is very unique in Japan. We don't have it anywhere else in our business for this size and scale. So carry as long and as far as you can because it's also a high-performing unit that keeps the system really strong because it's also, like you just said, growing more managers back in future franchisees, back in setting higher standards, running benchmarks. We'd love to be able to do that in the rest of our business as well as we do it here. We do it in pockets, but Japan has been a very strong corporate.

And Kakiuchi-San here, who runs the corporate system has been there since the start. So he's the guy in charge of the 400-odd corporate stores. And that is your focus, Kakiuchi-San. I mean have a chat to him on how he feels about that and the passion he has for his people, how he grows them. Just -- it is such a high-performing corporate team. You don't want -- I wouldn't want to -- it's not part of our strategy to go no, we just franchise now.

Your 2,000 store number would suggest about 100 stores per year growth. Would that be like a 40 corporate, 60 franchisee? Is that ratio going to hold constant going forward or what does that look like?

Impossible to answer.

And sorry, we're a little bit -- because we're going to do the best in that era. You know what I mean, like I can just be a purist and go, it's going to be a pure math. It's so organic and we may evolve and all of a sudden, we start saying, you know what, this is starting to become a stronger franchise territory. Or we might start saying, you know what we should retreat a bit here because the franchisee is not strong, we should make it corporate. Rather than just make one size fit all, what's the best way to operate in a very large organic space? What's the bigger theme? 60%, 70% franchised over the long, long, long term. But keep growing a strong corporate base and franchisees, but it's 2 engines running, and then it's a bit more elastic as you go. I think it's one of the strengths that we have. When you're a pure franchise business, if the tail starts rotting, what do you do with it? You see, we've seen our competitors close their shops when that happens, were we've always held it together. Yes. So I'm sorry, it's not as -- when you look at our 10-year plan, yes, it looks a little bit more like about 100, 100, 100. But in the reality, it won't go like that. It might go 130, might go 80, it could look a bit more like that depending on what's going on with catching up, get the ad fund rolling.

Maybe one way to answer this. So we look at prefecture by prefecture. So if we're in Tokyo, we might be able to give you a better ratio of what's corporate and what's franchise. But if you average it all out, it's not a definitive answer that I can give you. If it's corporates, we've got a good overhead structure. So it's probably going to be corporate, right? So maybe that's the way to think about it. Whereas more pioneering areas, we might be more franchised. We'll get asked that question all the time, and it's a really hard one to answer. So I'd probably go back to where our overhead structure makes sense. Tokyo, Osaka, Nagoya, probably corporate or more slanted towards corporate.

So it's more of an economy of scale thing?

Yes, yes, absolutely. Size and scale. Remember, 47 different TV markets, you got to get to scale. Tier 3, Tier 2, Tier 1 TV. Leaflets in the letter box, all those sorts of things, trying to get those new customers into the stores.

At the foundation, we always say nobody should ever own and operate more stores than they can operate properly. And we need to live by that same discipline ourselves. And so sometimes, we're not as strong as we need to in an area, too, and we might choose to sell that off because we need to live by example. So we say to our friends, I got 20 stores, I want to have 23 and you go, but you've got 5 that are underperforming. Let's fix those 5 before we go into a few more. Well then they look at you and go, you're a bit of a contradiction aren't you? And you go, yes. So we're also trying to live by our own -- because it's all human, right? It's all teams and -- sorry.

Yes, bear in mind, too, like we will put franchisees in Tokyo and purely because we want to see -- we learn of each other. And this is a great thing. Even when we started -- we started a few stores in Tokyo purely because we want to see what we're missing out on, if there is anything and vice versa. So it's pretty cool when those sorts of things happen because then you got those 2 engines that are competing against each other, trying to be better. I really like that tension in the business.

[indiscernible] on these franchisees, but the number of [indiscernible] franchisees you're getting now. You got more [indiscernible]. What's driving that? Is that a shift to the regions and where there's sort of [indiscernible] in bigger chunks? Or is there something else underpinning that?

Experience. It's a 9-year franchise.

You want to talk about that then.

Well, I mean just [indiscernible] bringing new franchisees in there and expanding within franchisees. So I guess it's just the natural course of where we've come from. In -- since December 2019, we've gone from about 216 to 520 corporate stores -- sorry, franchise stores. So naturally with that, you're going to have a big group of franchisees growing and you want to sort of match that with you guys coming in as well. We've also had franchisees like [ Fukomoda-san and Sino-san ] and some [indiscernible] franchisees in and around Tokyo, really build their portfolios up to sort of [ Fukomoda-san ] 22 stores, [ Sino-san ] 24 stores. So it helps to lift the average for sure. So it's probably -- with the amount of growth you expect to see that develop. But also, we've sort of introduced another tier of franchisee, locally we call them mega franchisees where they're sort of almost incorporating their own business, having large management structures of people dealing with their accounting, their HR, full corporate plans as well.

The thing that makes it hard to see as a shareholder is that in Europe and in Australia, we've migrated a lot of the large franchisees into our executive teams and you're seeing them all as the CEOs and so it keep diluting the numbers down. And that hasn't happened in Japan because we haven't had any English speaking or traveling speaking Japanese large franchisees yet. So as we've grown really quickly, those franchisees continue to grow. We haven't come and knocked on someone shoulder. But one day we might, inside the business might say, look, we need a new -- so this franchisee here come into the [ team DBJ ] and so that will probably happen at some point in our history, but that hasn't happened yet.

I think one of the X factors for me is that we don't go external. And I think you're seeing this level of comfort with our existing franchisees to keep growing. That's a big difference. So in Australia, we've gone external and maybe that's one of the reasons. But in Japan, we go only internal. So that then -- so you're dealing with people who just understand it. I mean, [ Fukomoda-san ], how many years in the business? 15 years, so 22 stores. You got [ Sino-san ] who's probably 22, 23 years in the business. They're comfortable with this model. And that's what grows at the other side. So when you're talking 22 stores, it's a lot easier than an external who hasn't brought -- growing up in the system. So it's actually a good thing because it derisk it for everybody as well.

Since he's here, I mean, do you -- I don't know if it's too sensitive to share, but would you be allowed to share his economics with us? I'm just trying to get a sense...

We're not.

It's up to him really because it's his private business. So...

[indiscernible], you mentioned you sold off a few stores. I mean those were 2 employees. And so like what kind [indiscernible] payback was [indiscernible].

We typically sell stores as a multiple of sales because the franchisee might run a different cost structure to the corporate business and vice versa. So what's their average weekly unit sales? Is it 24 in Japan? Ben? What's the average? Where do you sell the stores at now in Japan? Is it 24x?

24x, 25x. Yes, it varies depending on how profitable that store is. If it's incredibly high [indiscernible] store where it's natural with more it's generating a greater percentage of EBITDA. But -- if it's a low-volume store and we're putting something together as a package deal, it will be a little more.

This is 24x of what?

Average weekly unit sales, almost half a year, just under half a year sales.

[indiscernible] are you telling them what kind of numbers they are going to make?

No. No franchise business tells you the exact profit you're going to make. It gives you the indicative averages.

Then they do their numbers and work through what their overhead structures are and how they think they can run and then that sizes up their opportunity, right?

I mean these are sophisticated investors because they now run shops. They look at a shop and say, what am I going to do with that shop or not? It's their choice. And so they know their numbers and what they can run at it.

We couldn't misrepresent ourselves like that anyway. For us to come in and say, are you going to make this much money. We'll be in court every other week. So because it all comes -- we don't guarantee that.

So the APAC concept that was mentioned before that was -- was it EBITDA, return on the original cost, cash on hand?

Cash on hand.

Fully managed, all the management in place. So it's literally after management.

[indiscernible] 12% sort of marketing expense. It's the Germany [indiscernible].

Germany and France every year vote and the whole Europe votes. So the contract in Japan and in Australia is 6. In those markets, it's 4. So we go out to them and say, here's the reason why you should do 5 or do 6. That's the national advertising, which they call the NAF, National Advertising Fund, we call it the ad fund in Australia. Then you've got locals for marketing on top of that, which, depending on the contracts, it could be 2% or 4%.

So they are making you spend more [indiscernible] because of the returns they're getting. Is that fair?

And it's been because of brand is immature as well.

Brand is immature. You're -- to some extent, this is pretty simple that you're buying some sales because you're trying to grow your market share, you're trying to deal with that sort of stuff. So you can't compare it to Australia where it's at immaturity, right? We don't have full penetration. We don't have dense amount of stores in all our territories. So you're spending a bit more to attract that to grow that and you're growing, so you can grow, bring the future forward basically.

[indiscernible] 10% growth. It's a bit like is that average on the marketing spend or sort of buying into the future? [indiscernible].

I don't have to answer that.

I don't have answer that as well.

So given Australian contract, our Australian contract is 6% NAF, 4% LSM. We don't make them spend that. Because we've grown so well, how they've shared in that is that they only pay something like 5.2%, I think it is NAF or ad fund and most of them spend 1% to 2%. Now by contract, we could force them to spend more. But we're trying to help show the leverage of the system and what you get with scale and so on. In Europe, it's the other way around. We've been making them, well, not making them. We've been encouraging them because it's up to them. They've got a vote to spend a bit more from their contracts. And in here, it's been in the history. When we bought the business, it was 13%, we've got it down in now 11% to 12%, but franchisees are below that on average.

[indiscernible] 12% of sales?

Of sales. It's quite significant.

For everybody?

Correct. It's the biggest cost in the business that doesn't reflect the most of other Domino's markets. There are some that are like that. But if you look at the rest of DPE or any of the other publicly listed, that's a unique outlier. But there lies the benefit as it's coming down to us, and franchisees have been able to achieve that. So they look at one of our stores which is running corporate running, say, 11% advertising and they probably look at us and say, I can save 2% there because I can do that more effectively by being in my community and so on. I'll probably run another 2% better in labor because they have all that overhead structure that corporate have. So I'm already 4% straight off the bat most likely better off. We wouldn't guide them to do that. That would be most likely what they're looking at as they're doing their numbers. Because that's what their averages look like.

So when you're at 1000 stores, where do you see the average marketing as a percentage of sales?

Good question. Down. Life doesn't work like a spreadsheet. So what happens is the CMO is walking -- I'll tell you, he's the CEO and there's a CMO in the room. CMO goes, I want -- I need it, I've got inflation. Yes, but you just grew 15%, 20%. Yes, but I need all of it because I want to buy more TV to grow more sales, plus I've got a vote and they'll give you all the reasons in the world. Meanwhile the CEO sitting going here, but I want to open more shops and I need to drive unit economics to be in a better place. So they have a budget time battle. Sometimes the CMO wins because they've got a better eye and sometimes the CEO wins, but that's the organics of a real company as you're running it. So I would say, can Japan get to 7%? I don't know because it is Japan, it's different. It's got other metrics that are different. Would we think that considering Europe and everything else is, potentially that's a nice target to shoot for. It's also -- well, Germany only runs at 6% or 7%, but it's a much higher pizza consuming market. Does that make sense as well? So pizza consumption in Germany is even higher than Australia. So even though it's underpenetrated for its amount of television, it's the only television brand of scale, Domino's, and [indiscernible] something higher to start with. So you don't have to spend as much to provoke it. Which is the question for Japan. We always have to spend a bit more to provoke more awareness because it's not an innate, or do you hit a tipping point where it starts to become more innate. And these are all questions we don't really know the answer. Our 10-year plan wouldn't show 7% in it. Because we think that's a bonus to get to that. It might look more like a 9 or something like that. I don't even remember what the end looks like, but it's -- does that make sense? Yes. So I didn't mean to be -- make fun of it. It's just I know you guys would love to be able to model these margins out, but the problem with us giving it to you is that it might not always go that way. And then I've given you a target that isn't as robust as it could be. Good questions.

Just thinking about Taiwan, I know these sort of markets, Japan, Taiwan and maybe South Korea, a bit of a triangle, they're a little bit similar. Just in Taiwan, is there anything there that's a barrier to more franchisees like franchisee unionism like there is in South Korea or maybe any militancy in the market like there is -- in the corporate market, I mean, like we see in South Korea?

No, I think we are at the beginning of the process, right? So we are opening corporate stores now. I think [indiscernible] call it in Japan. So we are creating a pool of new potential franchisees. So we need some new energy in the group. We have like really -- that's an old group who were there for like 25 some years. And we have the new group already inside, but we need to train them and develop them and then 6 months from now the first group can start. So I don't see any barriers with creating new franchisees in the system within the next few year's time.

Very similar to Japan.

Ye, very similar.

Very similar. Like [indiscernible] opened stores. [indiscernible] like the territories we open. They're not as locked into the territory. There's certain things that we can do around that. So there's not...

So it's like Australia and New Zealand, Japan and Taiwan. Very, very similar. They're different, but they're similar. I was surprised, we -- our budget was 6 stores in the first year because we only had it for 9 months, and you got to wind up a pipeline. He's going to...

When we started in Taiwan, we had franchisees come out and gift us a store. They said, oh, we'll open a store for you. And that was a bit of a surprise for us. It was like -- and then it just kept on going. They could see it. They just were looking for the leadership to come through and quite excited about what's on the upside, right?

Where we hit in these markets, and Japan went through it as well, when you go from the order counts we were and that's how they go up over these years, double. To us, it's off a low base. It's still probably half what we're doing in the Australian business. But to a franchise in that market, it's like, oh my gosh, I've never done this sort of volume. So you have to do these resets of expectations of what is a high volume. What would be the highest now in Japan, audit counts that we...

Our order counts were 1200, 1300, 1400, 1500...

Yes. And that is the national average of Australia, and that's the highest. So you've got to grow up into these. And by the way, the Japanese menu is a lot more complicated. You see [indiscernible], they take longer to make, they're more premium as you've seen.

If you go add 100 orders, it freaks people out. It's a different labor model. It's a different -- it's like they've got to grow into it. It's like buying your kid's shoes, you buy -- there are 6, you buy them an 8, but they got -- they need time to get there.

Is that 1200 to 1400 a week?

Yes. We're talking about an example of a store like a high-volume store in Japan. One -- a few stores.

Typically, Domino's targets a 1,000 orders around the world. And we've got a number of markets that aren't at 1,000 orders, but they're at a higher ticket and we're just trying to grow into that over time.

By the way, that's the exciting thing about Taiwan, is that you've got a lower order count that's making money, that order count. So you're already at the breakeven. You're well past it, right? So then it's about growing barbell strategy without eroding the core business, adding the occasions and then growing people through those funnels. So that's what's so exciting about it is that -- and it's not going to be -- we're not going to add -- we're not going to double the orders in 3 months. We're going to do this properly. Do it in an efficient way. Otherwise, we'll kill the operation. It will just die.

[indiscernible] store that's doing say, 1300, 1400 orders per week...

It's making more money.

A timing market too. It's been there a long time, very entrenched, well operated, long history. Time -- and yes. That's one thing in Japan, we're talking about being careful of complete absolute numbers and leaving some volatility in that is that sometimes you just got to grow into that growth and then go again and grow into that growth and grow again. It's really funny, I was reflecting -- I was smiling to myself when Ronald Dekker was on the video because in 2006 when we bought the Netherlands, I did a presentation to franchisees. And I think we had 70 stores. How many [indiscernible]?

65.

65 stores. [indiscernible] was between EUR 4,000 and EUR 6,000. Look, it was a really low volume market. And I remember talking to them about how we might be 250 stores one day, and we're going to have to chase it with high volume mentality. And nobody in the room believed me. Nobody. And Ronald, on the way out, and I had met Ronald and had rallied many years, I said hey Ronald, what do you think and he goes I'm selling my stores, this is [indiscernible]. This is a great plan and by hook or crook the first promotion lit off, and it was just like they got a deal. Otherwise, none of the franchisees were going to follow me. They all thought I was a dumb Australian who had no idea. So yes, it's good to see that he's a huge success.

I know that you don't want to give us any hard numbers, but I think it's the fortressing model you mentioned where you wanted to bring down the delivery times, right, for store.

To a 10-minute drive time. That's 5 minute both way, roughly a 10 minute would be perfect.

So to make that economics work, because you're essentially shrinking the number of customers in that store's area, you have to increase the sales per customer, right?

Correct.

So this is essentially changing the habits of Japanese consumers to buy more pizza?

It's a bit of both. But, yes. But also -- that assumes that we're actually in every household as well, but we're not. We're not even close to in every household. So it's, yes, you want to grow frequency, but you also want to grow penetration. You need more new customers who are coming from, and you can do that. So whenever there's a new customer -- and this is why we do print, by the way, this is why TV has to keep happening because that's where you -- that's your big drivers of new customers to these doors, right? Not because we want to. I'd love to not do that, but that's where your new customers are. And when you're pioneering pizza as an occasion, you have to spend a little bit disproportionately on those media. So I'm sure [ Fukomoda-san ] and I would love to spend a lot less. But those are the things that drive new customers. And we're going to rationalize that in our business as well. We've got to challenge it. But that's it. So smaller territory, more customers in it, but then higher COV per customer, is the way to think about it.

Customer life time value. So more and more...

Can you track that over time?

Absolutely. And not only that, we even show franchisees individual customers, we poke him out and just go look at this customer here, see if were [ punitive ] at 1 p.m. to 11 p.m. last Wednesday, let's say you shut the shop and you went, oh, guy's walking in for a $7 pizza. Really, I want to shut down the ovens or I've got a delivery, and it's now going to drive 25 minutes from here, and I'm shutting down the store. I can tell you there some manager go, no, sorry, we're closed, we've already shut down the ovens. You might have just lost a $1,400 customer this year, which could be a lifetime value customer in say, Australia.

Can you tell us like how far you are in that process of penetration and increasing frequency? Like is your average Japanese consuming a 10th of the pizza as an average Aussie or an average...

I don't remember all the numbers. Domino's U.S. does present this to us because they track the whole world, and they show us all the time where people are at. Here's the -- we had a gentleman who was a private equity guy who we worked with, we used to call him our Chairman in France. His name is [ Jean-Marc Dean ]. He said, every single analyst in the world looks at the size of the market and how much you can get of it. He said, you guys never think like that. What if the pie got bigger? Everyone assumes the pie can only ever be a certain size. But what we continue to prove, and we don't know -- I can't give you the definitive answer because we may hit a wall. But with this better service, with this much more marketing with that better product quality, we seem to just grow more consumption in that area, including still in Australia. I talk to you about these stores. When we go to the stores that have the highest NPS that are doing these big volumes and you say, why are they still growing 10%, 10%, 10%. It's because they're just executing. I walk into a mirror and going, how is this store doing $60,000? It's -- how many homes are nearby, 7,000 addresses, right? Then you used to look after that area. It's nothing. It's -- and it's got McDonald's, KFC, Red Rooster, it's got every single national chain, and it's growing 10% on 10% on 10% executing flawlessly, right in the middle of town, beautiful carve-out. You tilt to say, well, it can't grow forever. That's what I believe, too, but it hasn't stopped yes. So I don't know the answers to those things. But what happens if we do by getting closer the customer continue to grow, I'll reverse it. The Netherlands is the best example. We go to the Netherlands, where we've given it for free. We bought France and they gave us the Netherlands and Belgium for free. Why? Back in those days, 2006, the view was the Dutch are too frugal and they don't eat pizza. Well, today, we've got 350 stores in the Netherlands -- 340 stores, and we'll get to 500 stores quite comfortably. We've got more stores than McDonald's. People don't think of it just as a pizza. They think it was Domino's experience. So when you're in Netherlands, you'll often -- somebody will talk about Domino's is just amazing value. So quick, such good quality, such -- does that make sense that we've actually grown food consumption, not thinking directly as just the pizza company, but more as a meal alternative delivered meal occasion. Those stores doing 4 to 6 -- I mean, the record now -- I think the record back then was about EUR 16,000 or something EUR 18,000 in the Netherlands, 2006. Now it's EUR 70,000 -- what is it, record in the Netherlands? EUR 72,000. That's a very different way to think. If I were to tell franchisees back in 2006 that one day, you'll have a store do EUR 70,000, they would have even all run for the doors going this guy's an idiot. And of course, you couldn't foresee that because like we're trying to say, it's not an organic line like that. It seems to be more like this on that journey, and we haven't hit any caps yet.

[indiscernible] So you asked earlier the question in terms of how many stores or how many houses -- people per store [indiscernible] population. The number actually in Australia is 35,000 people per house -- per store in Australia right now. And to a question [indiscernible] in previous Investor Day, we shared that when you look at the target in Australia, it's 25,000 people per store, right now. So the current population 25.7 million people divided by 1,000 stores is 25,000. So the question is, can you get to that level of penetration, that has been a jump from 35,000 to 25,000. Well the answer actually is in Queensland, which is our historic model. We reached that in 2019 and since then we opened new stores. So it clearly can go in Australia. That's our most special market.

Can it be done in -- are you aiming for [indiscernible].

No, I don't think we'll get to 25,000 in -- maybe Josh will, but if I may, another 15 years and look at those numbers, you'd really have to have some massive J-curve breakthroughs to get to those same numbers. That would put us at 3,500 stores or something, what would that? I think we've got to know what we know. Math says 2,000. On the journey to 2,000, do we hit a wall? Or does it go another again? What we can do compared to other large previous American QSRs is we can get into smaller neighborhoods with a much lower economic model. Because our cost of construction and build of a store to access to the consumer to breakeven is much lower. So as we penetrate like in the Netherlands and in France, we're now going into towns in France that are producing really good economics with 5,000 addresses. The burger companies can't do that unless they've got a highway and it's a highway store and it just happens to be the community. With probably the highest volume stores to open, the newest ones in the Netherlands are all small towns, aren't they?

Between 8,000 and 12,000.

Yes, between 8,000 to 12,000 homes. We used to think in the Netherlands, it had to be a minimum of 20,000 because the Dutch don't eat much pizza. It's coming down and down and down and down. We all have our own sub beliefs, and sometimes they leak out in these videos because they're not the real number. The real numbers are the ones we put in the market reports because the others are speculative. They're not -- somebody is on when someone says, you could have 3,000 in your [indiscernible], that's speculation, 2,000s is what we think we're going to get to and we'll see how we go from there.

If you look at the consumption of pizza, right, the last 5 years tenures, which types of consumption has increased the most where you had the most progress in changing habits or going from that Christmas only party sort of thing they used to have, right, to where we are now? Did you have particular success in certain types of consumption versus like solo dinners or whatever versus something else?

Yes, it's pretty broad. Put it this way, we've changed our pricing model to be no minimum delivery. So you're getting a lot of single pizzas come through. So that would suggest that 1 or 2 people. You've changed buy one get one free to half-price carryout, which promotes 1 pizza consumer as well as 3. So that then is quite broad in nature. So how do you work that out? But I would say that we've had a dense -- a pretty good dense in meal as a task, with pizza rice bowls and a few other things. But then also on the family side, the launches over the weekend, we've got Big Wednesday, Big Sunday, and now we've actually got bigger 3 days. So that's driving a lot more trial through the midweek. So I'd say it's more family that sort of style. It's hard to say. I mean again, which prefecture, which -- is it a city store, regional store? How do you want to cut the data? It's the problem with averages as they just don't tell you the number.

[indiscernible] When I first came here, is always pineapples and squid on pizza. [indiscernible] some progress and maybe getting other topping and things on to pizza. Yes. I just wondered like if you've seen like a generational change in behavior, just kind of what over time?

Well, a couple of things. A big American brand, which is what we are. We've got a couple of roles. We've got to bring authenticity from around the world in. So that's -- and -- so you got that responsibility to sort of bring in flavors and especially the way -- not a lot of Japanese travel as much as maybe other areas. So we brought in things like Italian ranges, we've brought in 10 cheeses from around the world. But then we also run the American pizzas as well. We've got the pepperoni. And I was saying to I think [ Joules ] over here that the cheese comes from the U.S. The pepperoni comes from the U.S., it's actually if you get a pepperoni and cheese pizza, it's the same pizza as the U.S. which is pretty interesting, right? So yes, right, It's exactly. So it's all -- yes, exactly. So that's the American toppings. You're getting an American Pizza. And that's part. And then what we do is we complement it with Japanese menu items as well. And that's part of the mix is that you bring from around the world, you bring American, but you also bring the local flavors in and that's the trifecta.

Is there a demographic you have particular successful?

It's a good question. I would say in Japan, normally -- if we take Australia or something like that, we have this sort of narrow sort of view, we have sort of 18 to 29, is that about right?

18 to 24 years.

18 to 24 years. Here, it's much broader we've got some of the -- we've got new and young, but then we've got people that have been with us for so long because we've been here for 35, 36 years that are still buying of us as they move through their age groups. So it's hard to say.

I really love this chart because you can absolutely see up until about here, we hadn't grown the market and then it just accelerates, right, if you look at the numbers. And the big thing here was this tipping point of just getting past that 550 and finally going into markets and doing a lot more advertising and accessing the consumer with a faster delivery time, more accessible and so on. So when we talk about high-volume mentality, every market you go into starts to look like itself. So Pizza Hut pizzas in Australia are Domino's clients. They don't look like Pizza Hut pizzas anywhere else in the world. They copied Domino's menu because Domino's was successful. And so did that #3 player, right? And here, Pizza-La was a slightly more premium product of what Domino's was in the -- it marketed itself on premium, but it stayed in the dark back streets, didn't go to the high street, if you walk around, you'll see it, right? But once we got enough scale and we started to break away, it genuinely stopped eroding the base and it just kept going. So that's genuine -- look at that now, from back here, there's 400 to 500 more units in chain pizza in Japan than there was in a market that was shrinking.

[indiscernible] more investment in advertising or we -- what was at the current quarter?

It was like there's no silver bullet, definitely advertising, definitely accessibility. The fact that we changed our structural and profit model that allowed us to get out into some of the regions which made the prices better because we were not as efficient running Tokyo ingredient prices with dough balls and national prices in [indiscernible], just didn't work, right? You had to bring the cost down to make it better pricing, more interesting menus, better digital. Digital, we brought in 1 digital here. So that was -- we had an old platform. But the question is, like that's on everybody's lips is that how does that flow? Because I still look at Pizza Hut, Pizza Hut's grown. Pizza Hut has grown from 358 to 482. They didn't shrink. Pizza-La is basically the same size, if not a bit smaller. So it's really a Pizza Hut, Domino's growth story at the moment in the market.

[indiscernible] growth assumption for sure. Yes, is Pizza Hut sort of [indiscernible]?

Yes, I think that Pizza Hut had stated 50% [indiscernible] before we did half price.

They did certain pizzas 50% off and 30% off. So it's a different sort of pricing model.

We can also put an add up in Taiwan, which is the new brand ad.

Maybe we can wrap it up and then we can get it on the bus.

On the us and talk on the bus?

We can talk on the bus. There is one bus [indiscernible].

Because Martin told you that we used to be an old man pizza brand in Taiwan and irrelevant, uninvented, not a lot of choice and then this is the new add.