Tom Monaghan In 30 Minutes Or Less
Founder of Domino's Pizza Inc.
"Always keep your eye on the operation."-Tom Monaghan
He is the hero of hungry college students and couch potatoes everywhere-the man who made getting a fresh, hot pizza as easy as picking up the telephone. By pioneering the delivery-only pizza chain, Tom Monaghan turned a single floundering pizza parlor into the nation's second-largest pizza chain. Along the way, he amassed a fortune estimated to top $1 billion. Not bad for a poor kid from Ann Arbor, Michigan, who graduated last in his high school class, was kicked out of seminary school, and enrolled in college six times without getting past the status of freshman.
Tom Monaghan's early life reads something like a Charles Dickens novel. When he was only 4, his father died-on Christmas Eve, no less. His mother felt incapable of caring for her two sons while she attended nursing school, so Monaghan spent most of his youth in orphanages and foster homes. When he was a freshman in high school, he decided he wanted to be a priest. But the seminary's strict discipline proved too much for the rambunctious youth to handle, and he was expelled less than a year later for such heinous transgressions as pillow-fighting and talking in the chapel. Returning to public school, Monaghan graduated 44th in a class of 44. The caption under his photo in the 1955 class yearbook read, "The harder I try to be good, the worse I get; but I may do something sensational yet."
Monaghan dreamed of studying architecture at the University of Michigan, but his poor grades coupled with a lack of money ruled that out. He enlisted in the Marine Corps, and by the end of his three-year tour, he had saved $2,000 for tuition. But he naively invested the money in a get-rich-quick scheme with an unscrupulous "oilman." Of course he never saw the money or the oilman again. With only $15 in his pocket, Monaghan hitchhiked from San Diego back to Ann Arbor.
In 1960, Monaghan's luck finally began to change when he and his brother, Jim, borrowed $900 and bought a failing pizza store in Ypsilanti, Michigan. Monaghan threw himself into the business putting in upwards of 100 hours per week. Eight months into the venture, his brother grew tired of the grind and traded his half the business for Monaghan's Volkswagen Beetle. "It was a setback, but I took it in stride and was optimistic," Monaghan writes in his autobiography, Pizza Tiger. "I made the decision to commit myself heart and soul to being a pizza man. My purpose was clear, and the knowledge that the future success-or failure-of the business rested on my shoulders alone was welcome."
Shortly afterward, Monaghan hit upon the formula that would make his fortune. He simplified the menu, limited the number of sizes and toppings, set strict standards for ingredients, and offered delivery service in 30 minutes or less. "The idea of stressing 30-minute delivery grew out of my insistence on giving customers a quality pizza," Monaghan explains in Pizza Tiger. "It didn't make sense to use only the best ingredients if the pizza was cold and tasteless when the customer got it." To motivate his drivers to make their deliveries as fast as possible, Monaghan gave bonuses to those who collected the most cash.
By late 1965, Monaghan was enjoying modest success and bought two more stores. That same year, Monaghan changed the name of all three of his pizzerias to Domino's Pizza.
Domino's Pizza Inc. found a receptive market in college towns and near military bases, and in 1967, Monaghan sold his first franchise, ending the year with a profit of $50,000. Monaghan established an ambitious goal of opening one new store per week-and he nearly met that goal. In the first 10 months of 1969, 32 new Domino's sprung up, mostly in residential areas.
But the rapid expansion proved to be disastrous. Almost all the stores failed, and Monaghan found himself $1.5 million in debt. To avoid bankruptcy, he relinquished control of the company to a local businessperson. He regained control within a year, but the ordeal taught him a valuable lesson. Monaghan vowed that there would be "no more expansion for expansion's sake," reduced his goal to 20 new stores per year, and began selecting his sites more carefully.
The strategy worked, and by the end of the 1980s, Domino's had grown to 290 stores. To celebrate the opening of his 1,000th franchise in 1983, Monaghan realized a lifelong dream by purchasing the Detroit Tigers baseball club for $35 million. The very next year, the Tigers won the World Series.
Domino's remarkable growth continued throughout the second half of the 1980s, and by 1989 the company boasted almost 5,000 stores in the United States and nearly 260 in other countries. That same year, Monaghan shocked the business world by giving up the presidency of Domino's to devote more time to Catholic charities.
He remained chairman and CEO until 1998, when he once again surprised the industry by announcing his retirement and selling his 93 percent stake in Domino's to the Boston-based investment firm Bain Capital for an estimated $1 billion.
Since retiring, Monaghan has become even more active in the Catholic Church, pledging his time and money to charitable endeavors such as building churches and missions in Honduras and Nicaragua, and the founding of a Catholic law school.
As for Domino's, it's doing just fine without its founder. In 1999, it boasted more than 6,200 stores in more than 60 countries, and was the world's No. 1 pizza delivery company and No. 2 pizza chain overall.
A Very Special Delivery
In the early days of Domino's Pizza Inc., Tom Monaghan not only managed the store-he delivered his product, too. One evening in 1962, he delivered a pizza to a dormitory at Central Michigan University, where switchboard operator Marge Zyback caught his eye. Six months later, Marge took Tom for better, for worse, and for all the pizza she could eat.
The End Of An Era
After a number of fatal accidents, several lawsuits and numerous complaints from consumer and safety groups that its 30-minutes-or-less policy encouraged reckless driving, Domino's Pizza Inc. discontinued its trademark delivery guarantee in 1993.