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 more stores? So yeah, I'm very excited to get this role, and I cannot wait to start, basically, and to be in that market.
If you look at each step of my career in Domino's, it basically started before Domino's because we did have our own pizza company called Pizza Team. Our stores that we had became Domino's. My partner and 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 moved to this site because this is in the middle of the historical center of Leiden, more people walking by, and from that part, I was also trying to make my stores look nicer than the actual stores did look like, and André ten 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 changed, 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, over here in 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 worked with 250, 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 contact. 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 where 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, giving confidence to people. Let them make mistakes, so I really hope that the people will make decisions, and not all decisions are right, even for everybody. For me, I have made mistakes that have 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 could 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 Taiwanese 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 also is having sales. So it's so important that we will grow the sales. We have fantastic colleagues helping us out with those kinds 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 loved to go to the stores on the Sunday nights when we broke records. That is always memorable. And also, the things that really make you proud, if you have people working for you that become Managers of the Year in the Netherlands, European Manager of the Year, so that people grow themselves and also that people are becoming franchisees. So I started off with a franchisee as 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 that 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 are the memorable things that I love within this company. I'm Ronald, and I'm Domino's.
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 two and a half years. It's just incredible how quickly time's flown. We haven't been able to get 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 a 600th store. Japan's 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. It's going to be great touring 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 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. While I'll start out the introduction, it's really about the management that are delivering. I couldn't be more proud with the tenure that we are able to achieve in this business. 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 you might have been around 30, 34 years. None of us have dealt with some of these things. None of us have dealt with the pandemic, of course.
None of us have dealt with this sort of inflation, but still grounded 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? 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 such a connected world, the world is really, really connected with the amount of social media, with the amount of technology, always pouring into those little screens within our reach. But actually, when you study, more people feel isolated than ever before. And this is 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 partying on TikTok, the way they're having these Reels, the way that they've got their Instagram life. And my life's 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 are 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. When we were young, we used to say a burger's loser food, right? Because you have it on your own. You hold it in your hand, you eat a burger. It's a one-off thing. You're eating fries. Where pizza has always brought people together, whether it's during sport, whether it's family. There's whole studies where there's video cameras inside homes, what happens when the pizza arrives and whatever. First time you'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 it's breaking bread around the table. It was also born in universities where you don't have cutlery.
The packaging is fully recyclable, so you can put it in a recycled bin and it's all done. You don't have to do a big cleanup and everything else, right? It's also so 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, Naomi, I'll slow down the 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, around the circle. But when we nail it, we get all three 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, one of seven 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 three years. And surrounding our purpose are our five values, which we see as floating moons around the purpose. And you would have read many of 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, often it's that spinning plate 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 remunerated, 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. There was a really famous investor, many of you know, without mentioning the brand, who came out last week or last month and said, "We're going to give companies a buy for one or two 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's 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 party? How do you try to balance these things through? Ultimately, if the customer's winning, that will flow into our unit economics. Our franchisees will win. If we're continuing to invest in our sustainability, our communities will 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 or you 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 two or three years that don't belong in the future because they're dragging us down?
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 his store's doing AUD 50,000 in sales and being a tower of growth. But he said, "Don, most of my growths come from these 2,000 homes. I'm getting AUD 10,000 of sales, but it costs me AUD 16 to deliver there." And I was sitting with this particular franchisee, Greg. He's an eight-store franchisee in Southeast Queensland. And I said, "Greg, you've got to cut it off." He goes, "But I can't. It's AUD 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 standing there as a partner because, of course, we lose food margin and royalties when we cut that off. But that's short term. The longer term is that original store will get back up to 50 and far more profitably because it's sub-economic in today's world to be delivering at AUD 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 of 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 influences like the pandemic. When you get large external influences like Ukraine war, energy costs, and food shortages, and so on, so when these things come at you, they can become very quickly, you can freeze with your mental. And so it's often, no matter how well you're trained and how well you're inspired in this culture, it takes a lot of leadership to keep asking the question back, like dropping those 10,000 homes off, which isn't innate. It's so much in our business to grow, and you're telling me I've got to drop 20% of my sales off? And you go, "Yeah. Yeah, 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 me is, "How do I put my price up to match that?" And with an average delivery cost of AUD 9, adding AUD 7, the prices just don't add up. It just doesn't work. So here's 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. That we really materially grew this business. And one of the ones that if we went back just four 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 a new entrance. What we want to be able to illustrate to you today, no, actually, that's one of the biggest tailwinds in the history of our company, in fact, that the pie is getting so much bigger. We won't wake up with the same share of digital delivery that we started with eight years ago when we were 80%-90% of the market. But you don't need to because the market is just so much bigger. 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. We've been able to grow our sales and earnings accordingly.
Many of you heard, "When I grew up in this business, I used to have two MDs going to the Worldwide Rally," which we went to three weeks ago in the U.S., that we'd rock up, and poor old little Australia happened to be in a really bad currency slump, and the U.S. measures everything in U.S. dollars. You feel like a loser, right? You come back two years from now, and now we're on a currency tear, but that was really frustrating because that had nothing to do with your performance. That was an external influence. The other thing, so currency used to drive me crazy. The second thing was there's just not enough mouths and stomachs in Australia. 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 population in the U.S. So I have a private bet with the biggest franchisees in the US that I set with them five 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 store count to where we are, but we're growing faster. So we're on a tear for that. Do you feel any more confident about that now than when you had it a couple of years? 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. So my motivation was very different at the time. I was sitting in a room of franchisees like, "They're all going to the U.S., it's done." And you're going, "You've got to be kidding me." And it was then 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. But I hope we both win because I can't lose then 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're continuing to grow this network.
It has been more challenging in the last 12 months. The shortage of materials, staff, inflationary costs, it has been more challenging. For those who have faith, you're going to see a lot of stores open this month. Unfortunately, it's always June and December. You're going to see that we're hitting our targets organically of 9%-12%. 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%-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. You can see that, that the store count, even sometimes when you're in amongst it all, you don't smell 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 relatively 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 soon as you 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.
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, France, 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. Look how quickly Japan rallied to look at 2,000 stores, but yet it wasn't that long ago. It had milestones 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 markets are way underpenetrated relative to the other markets that have been given on like businesses. So when we look at our medium-term outlook, once again, these are not guidance. These are outlooks. We do think we can grow our organic network at somewhere around about that 9%-12%. So that's still something that we believe. It is harder than it was two years ago, three years ago.
There is the size and scale in our business that gives us that view that we can deliver on that. How do we deliver? It hasn't changed. I addressed the whole international Domino's away day outside our business a few weeks ago. It's really interesting that 62-year-old brand that the founder, Tom Monaghan, gave us the roadmap, and the roadmap's never been more true than it is right now. He pioneered home-delivered pizza. High-volume mentality is an extreme version of what he called Handle the Rush. Because for Mr. Monaghan, who's still alive, and we still meet with him and talk to him about our business plans, he's always very excited. If anybody ever walked up to Mr. Monaghan 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?" In other words, you don't have enough oven power, enough drivers, or capacity. And someone will say, "For two hours on Friday and Saturday night." I need for two hours on Friday, Saturday, and night. But if you put a cap on that, you put a cap on Monday. The best way to grow Monday is grow Friday because rising tide lifts all boats of how the business grows. And so famously, many, many years ago, Mr. Monaghan visited my Morayfield 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 stores didn't have any more than two ovens. And I said, "Mr. Monaghan, 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, Don, but you've got to do something." In other words, you've got a mental barrier right now. Whether you put the third oven or split the store, the status quo is frozen, and the business is starting to suffocate.
As history has it, I put a third oven in and split that store, and today, there's about AUD 150,000 done out of that area in the whole Caboolture area. 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. 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's been roughly just under 27%. Last financial year, we did just under AUD 3 billion in digital. It's still the fastest growth part of our business. Digital delivery 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 carry-out. The carry-out market's 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's pickup." And the answer may not be that. The answer may be, "You're 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's shrinking. It probably should show a negative number, although it's, 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 AU numbers, by the way, as 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%. 2016, we were 90% of the digital market, and today, we're less than a third. 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. 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 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 limits this from happening?
What limits 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's that? And I've heard people's justifications, but it doesn't make any sense from my understanding of retail. And two is that, "Well, we're all in this together. If the inflation was 10%, we all should just pass on 10%." Well, that's not real. That means the customer's 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 carry-out. 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's healthy. But the restaurant 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 it 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-pandemic. We could see it here in Japan pre-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 while 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'll have one more slide before I get to that.
When we think about this, we think about where in the category you'll try a Pizza Rice Bowl, and there's some products that are coming out in Australia in the next six months. Where are there other segments of the market that we can tailor to meet customer needs as delivery keeps booming? 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 embraced 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 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 an AUD 7 order and an AUD 60 order. If you're punitive in one of those experiences, a bad delivery or a punitive pricing on carry-out, 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 it 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 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 six to 12 months, we've done a whole baseline study for our business.
We're now 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 uplifting 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 roadmap 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, it was really hard to get a sense. If you 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, weren't 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 fleets, 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's not just price. It's what you get for the price. So as we think through, and there's more activity now than probably any time in our history because we have 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, image. Product, service, and image for that price. We've talked a lot about more for more.
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. It's this beautiful virtuous cycle as a business that you'll see in a minute. I'm going to give you the numbers as we reduce our delivery areas and our delivery costs, 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 this cycle. We do see places on the planet where there's a limit.
You walk into Maryborough, you walk into Gympie, stores doing AUD 60,000, and you're out in the middle of 5,000 homes, and in every direction, it's three or five 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 becoming 70 and 80 and 90 or 100 or whatever, right? There are places where there is a limit, but they're fewer than they are. It's more common with expanding territories with suburbs that are branching out, with density of apartments. I look at Hamilton in Brisbane, or if I look at West End in Brisbane, and they would consider tiny little areas not too long ago.
But with the density that's built into those areas already, you start thinking, "No, there is viability for another store," unlike a Gympie and a Maryborough 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 it 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 used to map out the brands, it seemed that Pizza-La peaked 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 at Christmas, New Year, and Golden Week because that's what you could 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 television 52 weeks a 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 while we're spending more on advertising and we've got more stores. So that individual economic unit is getting leveraged 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 through to keep feeding the target to keep growing, if that makes sense. The other thing about smaller delivery areas is that drivers 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 four deliveries an hour, and for argument's sake, it costs you AUD 20 an hour, the base cost is AUD 5 a delivery. If you can do five, you can pay AUD 25 and have the same base cost.
If you can do six, 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 where they'd be bikes or scooters. Cars are inefficient. Cars have the highest cost and obviously the worst sustainability. A two-ton vehicle delivering three or four 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 bikes do have a limitation. They can't get on freeways.
They can't get out on highways. And there's 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 see 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 one or two years in age because to have a car, it's often you've got to be older to get a car license versus the 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're providing employment. So a lot of these things assist us in driving better delivery times, better access to the market, and 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 is still about 35%. And the difference, besides the fact of the use of electric bike and everything, which is all sort of integrated as policy, 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 five minutes there, it's most likely five 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 times builds a stronger, more robust business. And this has been a slide we've already shown in the past, so it's worth showing again. This is Bradbury in New South Wales out near Campbelltown out west. And you can see here the amount of deliveries that are inefficient, the number of reds. And by putting a store in, 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, if 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. Our bottom 10% still are completely inefficient. 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 and Japan because they genuinely do have some of the better numbers, particularly the Netherlands, which is almost exclusively bikes today. They do have s ome scooters. Ben?
Can I take issue with the delta between the claim of having profitability per store these days? Otherwise, is it like a couple of hundred basis points between the top and the bottom?
Could even be more.
Yeah. Could even 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 I'm sharing with you doing 50k, he's not making as much as he should out of 50k, but he's still profitable. But his 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 reduced it. But you can see where a huge amount of work to be done in the lagging part of our business. It's the ones that want to do the least amount of change. It's harder to deal with these complications.
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 two because they're a little tiny pocket that's just outside this area called Park Ridge in Brisbane, it's just 2,000 isolated homes. There isn't that 2,000 homes do not sustain a store today. Then there lies the question, could a truck do those one to three days a week and do another area one to three 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 program of innovation. But it is, in some cases, we may cut off area 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 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 to 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 opening more stores. When 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 if it can't grow without franchisees' P&Ls growing. And Dave Burness is an ex-franchisee. He's been a franchisee 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 penny just drops. If sales go up, we both go up. If sales come down, we both go down. They are completely aligned. It's all about more volume, right?
What we're so proud about, you saw it in the Ronald Dekker 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 multi-unit owner, which is what most of the franchisees aspire to be. Then 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 a team member. How many businesses out there you can start as a team member, and you can become an owner or an executive?
Do you do a good enough job identifying this to potential staff? Because if I'm a Uber driver, I don't have a path. Whereas if I'm an entry-level individual that dominates as a driver or a pizza maker, I have this path that in a fight for talent that's probably important. Do you think you do a good enough job?
The answer is across the board, we don't. But in well-run franchises, we do. And so a well-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 in test stores right now, it's been in production for two and a half 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.
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. It's 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 it's, "I've put all this energy into you. I don't want to let you out." Kikuchi-san, who's sitting just to my right here, has grown, gosh, how many franchisees in this business here? And always at his sacrifice, because Kikuchi-san runs the corporate stores, runs one of the biggest corporate networks in all of Domino's Pizza.
We've gone from zero to nearly 500 franchise stores. What is it? 480, something like that?
520.
From 520, which then goes over to Ben's camp, in the space of what? Eight years. And all of that, not all of it, but the majority of that came at the sacrifices he had to make because he was training these people who then he had to retrain to replace them in his business. That's an example of someone who understands the Path to Excellence. But not everybody's Kikuchi-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 avatars. You build your own avatar, and you go this whole journey, keep a trophy cabinet as you go, you get rewards. It's a super cool app. I've actually got it on my phone. I can show a demo if anybody wants to see it when we're out and about.
But anyway, let's listen to those who actually do all the stuff, not just run around the world like me. So hand it over to you, Josh, I think. Any questions before I sit down? Any other questions?
Can I leave Q&A to the end?
Oh, you leave Q&A to the end? Oh.
Q&A at the end?
Q&A at the end.
Okay.
Sorry.
Use your mask.
Yes. Oh, let's go quick off that one. It's a bit scary seeing yourself next. But 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' experience just on these faces alone. And we actually did that exercise back about four or five 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 it kind of answers your question a little bit. Do people know that?
But 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 Kikuchi-san. I think you've been here for just about all of it. And we've got Sasaki-san that was here for just about all of it as well. So these are the people that sort of light up our business and have 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 three years ago, we've actually grown 367 stores. So it's incredible, incredible growth for our business.
Just what I'm going to show to you today is that this was all part of our strategy. I'm going to take you on a bit of a nostalgic view back of when we stood up there in 2019 and took you through what our strategy was. That was important because I think it'll give you a sense of the trajectory that we started before we even heard of that word COVID, right? We had no idea what that meant. I think it'll also be helpful to put some context around the rebasing that we spoke about in the last investor day. I think it'll also help you understand where we're going and why we're not done yet and why we've got a lot more to go and why the strategy still stands. It doesn't change. Strategy just doesn't change.
Yeah, it does sort of move a little bit. 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 tour last time? Just a bit of a show of hands. So we've got a few people. So you'll recognize this. So just as a reminder, our business was a special occasion business. That's what we spoke about. And it always made me nervous because 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 the CEO nervous, makes everyone nervous when you're only sort of making most of your profits through that time.
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. That just simply wasn't true. We started the process, as we do with every single thing we do, we start with research. We start looking at, well, what are those? What are the things that we can do here? What we realized is that, to the contrary, they didn't want to just eat it at Christmas. They actually just saw too many barriers. The price was too high. The speed of service wasn't good enough. We had too big a bundle. We were trying to sell the most amount of pizza to people, and that's not what customers wanted. Then we had the perceptions of an unbalanced meal. People needed something more in Japan.
Pizza's 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 three and four thousand 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 lunch day, watching sport with your friends, and there was another one there. I think it was drinking at home by yourself. It's actually a big category here, and I think we've all done a bit of that over COVID, I think, but all these areas were things that we just had to break down barriers on.
But we've 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 at it strategically. Customers were really put off by having a minimum delivery fee. They weren't sure if they wanted to trial Domino's at such a high price. Remember, it's not as eaten. It's a high risk. You've got a family. You've got someone who wants to buy 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 were the only ones really doing it. And then Amazon started doing it a little bit more.
And then COVID changed everything from there. So what did we do? We removed the minimum delivery fee. We also launched a thing as Domino's As You Like. We'll deliver it any way you like. If you're in a dressing gown, 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 one, the three, the five pizza consumers? They just didn't have an answer, and we didn't have an answer to give them. And so we went to Half Price Carryout. That unlocks that one pizza consumer. That unlocks the three-person consumer.
But it actually does something even better. People in Japan, and by the way, not people in Japan. People all around the world don't like throwing away excess food. That's true in Japan. The love of leftovers 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 occasions, 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 a staple. You have to have rice. So we launched a thing called the Pizza Rice Bowl, which are absolutely delicious. And 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 upgraded our side offerings, and we launched things like Thicks hakes. What's really cool about Thicks hakes is that 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?
We had this tenure. I just spoke about tenure in our management team. But it's not just tenure in 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 planned to provide much more opportunity, greater opportunity for franchisees to become multi-unit franchisees. This meant that we've grown our base by 15%, but in turn, they've actually grown it by 80% themselves through multi-unit ownership. 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've found sites that are appropriate for us. But also through COVID, COVID's actually an interesting thing to draw to here because while 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 eight to 10 years." All of a sudden, through COVID, we've got these sites. We've got availability. So we just took the opportunity and ran 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 needed more stores. We needed them closer to the customer. And we always talked about this thousand-store goal. We weren't national until we got to this thousand stores. Now, is it 1,000 stores? Is it 1,100? Is it 1,200? It's around about that. We were a company and a business that were in Tokyo, Osaka, 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 chart I showed of Campbelltown. That's exactly what's going on as well. But we're 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 into 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 costs out in these areas? Dough projects was a big one. So for the first time ever, we're doing back-of-house dough. This was something that wasn't available three years ago. 2019, we weren't talking about back-of-house dough. 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. 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's a big one for us, so we've expanded through franchising and balancing the equation of the expansion of our 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 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 there's 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'd 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. were calling us going, "How are you guys doing this? How are you keeping up?" Well, we were doing it. And we sort of thought 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'd seen we had actually gone through state of emergency lockdowns in many places. We'd had regional lockdowns. We'd had prefectural lockdowns. And we'd 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 a rebasing.
We saw customer counts go down. And as we do, we anticipate this V-shaped 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's going through this 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 had settled to a new higher rate than pre-COVID, our margins through that period of time were hurt. Took a little bit of time to unpack that and unwind that.
We did that. 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. Hopefully, 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. But 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's this translated? 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, and we anticipate this V-shaped recovery, but what I look to here is what we saw with franchisees.
Franchisees responded appropriately to us. 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 yep. You're looking at 12 months to March 2022 because the rebasing started in yeah. So yeah. So I'll get to that. So there is a bit of noise in it, 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 sitting at seeing the data. It is higher than that. So it'll be clean numbers when we come out the other side, but we're seeing those still trending the right direction. So where are we now?
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 number one in any prefectures. We're actually only in 17 prefectures. And what you can see, 2019, when we spoke to you, we were number one in eight prefectures. Of the 36 we were in, and now we're in 47, and we're 20 number one position. We've got number one in 20 prefectures. And it shows you the growth. It's still our goal to be number one in each neighborhood. Now, just being number one 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 number one in those prefectures. 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 three 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 any way to get there. We have to stand up dough facilities. We have to do a range of different things. But there's five million people up there that we just couldn't service." Back-of-house 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 number two. In the next couple of years, we'll be number one. And that'll actually take a fairly big stronghold off Pizza Hut, who are operating. That's actually Pizza Hut's largest franchisee up in Hokkaido. So let's have a look at the markets and what the pizza market's doing. About four years ago, we took the number one position in pizza. And we'd seen the other competitors pretty close. But what's pleasing, we've been able to grow over the last four years. If you actually look at 2013, we're actually three times the size in nine years. So I'll give you an idea of how fast we're growing.
Whilst a lot of the growth in the whole pizza market is driven by us, the thing to take away here is that people are eating more and more pizza. We are growing share of stomach as well as market share. Yeah. Sorry. One of the two bars at the bottom, that one's very reliable. Independents. Oh, sorry. Yeah. So you've got independents. Small chain. You've got small and mid and independent chains. Do you remember which one the colors are? That's another sign. Do you remember which one is the independents and which one is the small chain? Small size chain, so under 50 stores. Under 50 stores here. And all of them. All 50 stores, middle, high, and chain. And there's quite a few of them. Yeah. These are regional players. You might be in two prefectures or three prefectures. Yeah. There's brands like Chicago Pizza.
They might have 80 stores. There's Napoli Pizza. They might have and Strawberry Cones, two of those together. They've got 100-odd stores. So you've got these little chains that stood up. More Japanese-style pizzas, maybe a little bit more sit-down, a little bit of delivery. They've got a range of different pizza players. Not so much in Tokyo. Tokyo is more Tokyo, Osaka, and Nagoya. They seem to be more us. And you'll see Pizza Hut. And you'll see Pizza-La as well. Yep. 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 slowing down. We've created this clear path in the business. What we know is scale matters. It really does matter.
We've demonstrated to date the benefits of actually reaching this scale and becoming number one 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 of no minimum delivery is that we have to provide an answer and access. We've got 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. But 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 it. And we start looking at the barriers to expanding our customer base prior to COVID. Now we're looking at where can we expand post-COVID? And one thing you've got to remember is that while the scale of our marketing funds actually allows us to do a lot more things. Back then, 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 gatherings, 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. What I'm going 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 trial.
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 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 doesn't mean you're done. It means that, okay, you've actually got a whole cohort of consumers that already love you. You've just got to work out a way to get them to buy more and more frequently off you. There's plenty of room to grow in those areas. I ment ioned before the importance of. Yeah. Yes. Yeah. Sure.
So you're trying to get folks to buy pizza more often, right?
Yes.
Do you have any numbers on that, on the metrics on that, or have you got any sort of?
Well, that goes back to the frequency chart. So you're talking about in these particular segments? Right. Right. Because the starting point is you're going to buy five pizzas for Christmas or something, right? Yes. And you're trying to get to a family might buy a pizza for a family dinner. A guy might buy a pizza for a solo dinner. Is that transition working? I just wanted to give us a. Yeah. So this is exactly what that shows you. So you've got this transition up the funnel. So you have new customers coming in, and as they transition up the funnel, you get more and more frequency. Do you have any color on which types of customer is contributing to that greater frequency? Is it solo dinner or solo lunch?
Where are you getting traction? It's a good question. What I 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 meal 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 at Christmas as well. So it's not as one-dimensional as that. So just to simply go, "Well, this is how many we're getting out of single—" You've got to think of customers as more dynamic than that. They're 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. Each customer might have four or five.
So I wish I could give you a definitive number. We are growing meal 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 no minimum delivery has unlocked that. So we actually now get more volume through our lunchtimes. 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 yeah. What I hope to get to is where we are able to string all these together. And we have a unified customer database where we can actually string those profiles together.
It will spit out a certain profile where we will have to market to them. So if you then get an EDM, a mail, you'll be able to say, "Well, this customer has a family. This customer also likes lunchtime. He loves" for the Australian guy, "State of Origin." So we're going to put a deal in for that and so on and so forth. Because I think where it gets 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. Yeah. And that's. Yeah. Sorry.
So one customer in a year, how often are they ordering? How many times a year?
One customer per year? Sorry. What was that?
Average orders per customer.
So at the moment, 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 Christmastime. And we're still dealing. Remember, the business was built on that. But what we're seeing. And that's just part of the strategy, right? It's to build people up and through this. Hopefully, in 10 years' time, we're talking about this being really big and this sort of starting to get much bigger as well. But the frequency has grown enormously. We used to talk about two times a year as an average. Now we're talking four to five as an average as well.
So is that the whole cargo potential for 1,000 years? So if you look at the next five when you go to work in the customer store, the last 10 give you customer numbers are higher. So obviously, your average transaction value is coming down.
Sorry.
Where are y ou? I'm sorry. Yeah.
So if your customer counts up for the quarter. Store sales up less, presumably your transaction value. Is that because you're seeing more simple occasions than complex ones?
It's a little bit. I mean, barbell strategy is really important. We're moving our whole headspace as a business to customer lifetime value. And we actually look. Yeah. So the barbell strategy unlocks those occasions that then enables them to go up through that frequency curve to more and more occasions as they go. So that is part of the barbell strategy. It's also carry-out. So you're getting more carryout as the costs come out. That's showing an average weekly store that's getting strong at the same time. It was like 200,000 orders and 157,000 orders. So minimize that.
As much as we can point to deliveries, in fact, still faster store count now from the carving out because that's like the likelihood this is the average. Does that make sense? It's a few separate data points.
Yeah. Yeah. Yeah. Yeah. That makes sense.
You look at, like I say, an Australian customer, right? Like orders per year and a Japanese customer. I mean, what does the difference look like there? Is that frequency? Are Australians like 20 times more likely to order Domino's? Or what's the - What does that look like? I don't know the exact number, but much more frequent customers. They're seeing behavior. It's got a little bit different to - Australia is more like the reverse. Yeah. You're very heavy on super heavy and heavy and much less light. So it's a reverse of that. So those frequent users? But less of them, but they buy a lot.
So you've got potentially half the market buying pizza, but the inverse is that a lot of business comes from super heavy to heavy. So it's literally the reverse of that because Australia doesn't have 125 million people that buy some half the market here buying Christmas and Golden Week or the birthday. Even though Josh and Todd and the team and the whole leadership team have moved people down, it used to be hardly anybody would ever use it before. I mean, they were so rare in Japan because people just didn't eat pizza. So you had hardly any. You saw from that graph, and that's only three years. It went back eight years ago. Yeah. That's okay. And so, Don, if you could just wrap that question up. So the average Australian is going to order every four weeks or every three weeks?
So we try not to talk about the average Australian because it's too diverse. So we call our main target customers every 12 days. Yes. But averages go wise. And when you're really trying to grow a business that's saturated like Australia is, you're really trying to get more people into that from medium into that heavy because they just want so much more money. Does that make sense? And that's more even occasions than it is even a new buyer. There's not as many new buyers to chase as there is to shift people up the occasions. I'd also caution that comparing Australia and Japan is probably not the right thing to. So think about where I kind of think about Japan as where Australia was at, sort of 400 stores. Without that penetration, we're still got a long way to go.
Making that where we are in that curve may lead you down the wrong path trying to because they're different maturity cycles. Just completely different. We've got a big corporate base, different franchisees. Our outlook isn't the same as Australia's. $2,000 on 124 million people, 1,200 stores on 30 million people. They're not expecting to be the same either, right? Yeah. Milestones this way.
Yeah. Josh, sorry. Just to clarify last month here, how has your earnings profile changed throughout the year but also throughout the day? When you introduce the barbell strategy and driving more occ asions?
In terms of earnings profile?
Profile, yeah.
From a store base.
It increased two months and slightly every year.
Oh, okay. Okay. I understand the question. Yeah. Obviously, I'm saying it every time we meet, I think I like to sleep at night.
Having a business that only makes money at Christmas and Golden Week was what I walked into. Now I sleep at night. So we make money the whole way through. And that was part of it. Because you can't have a business that doesn't do that. That's not a sustainable business model. So that's where having a profile's going.
I'm sorry. So your competitors have a way of opening these stores?
Not really. No.
When the thing comes up now, we're not buying, right? Is that explained by their strategies by merging from yours? How are your competitors changing? Are they changing with the market? If the market's buying more things more frequently, are they trying to target those customers?
There's a couple of things going on here. So if I look at Pizza-La, I think Don had it right.
I think they just blinked and they just stopped doing it. The difference with our business is we are 100% focused on pizza. If you look at Pizza-La, they've got a range of other options. They've got high-end restaurants. They're doing paellas, sushi out of the same Pizza-La, delivering it. We're focused on pizza. That's all we do. I think there was a—I can't talk for them, but we're not distracted by anything. I think there was a distraction there. Pizza Hut also went through a change of ownership, so they were trying to figure out where the toilets were in the building at one stage, and we overtook them, and they've started to sort of ramp up now. But their version of ramping up and our version of ramping up are two different things. Yeah.
We originally said we would get to, and I'll sum this back to fund it, it would be that six or eight hundred stores through market share gains. And we couldn't promise we would go beyond that unless we grew the market. And what you've seen in the last three years is a genuine shift to growing the market. So the light and heavy, as much as they look like small bar graphs, they still worth a lot of money because they are the more frequent customer. So there's a real genuine shift down into that area. And that's growing more consumption. Whereas in the first few years, the first five or four years, it was literally all just market share stealing. We were just switching out a customer. There was no evidence.
When you look back at that graph that showed the pizza market, every time we opened a shop, somewhere else a shop fell out of the business in Japan. Whereas in the last three years, there's a net add, and it's basically Domino's and a little bit of Pizza Hut that have added stores. But the other shops have stopped closing, which illustrates real consumption. Because if our average unit's doing more and we've got more stores, that means total consumption is growing, right? Because the other ones are not closing anymore. Very little closing. Same for the QSR, potentially, yes, other meal occasions. Yeah.
I see COVID, the aggregators, like the Uber, these guys have really taken off, right? Has that been a tailwind, a headwind? How does that help normalize the idea of delivery? I think there's something that was.
Yeah.
I think that's a good way of saying it. Normalize is delivery. And then opens up more delivery. So the size of the delivery market has grown. And we've got everything made for it. Our products are made for it. Our systems are made for it. Look at our delivery times. We're ready to go. We met with Uber last week. It might have been the week before. The first thing they asked us, "How do you do it?" The other way of looking at it, between 1995 and 2005, delivery was in decline. And the only way we grew our business was with carryout. And even when we first looked at Japan coming in, we were thinking by going to the high street, we'd pick up all this carryout business. But with delivery and digital delivery, and particularly at the end of the aggregators, delivery boomed.
Now the fastest growth market, which I'm not sure I was clear enough to market that, is the fastest growth part of the QSR. So it's a tailwind now versus a headwind. You guys are on Uber in Japan, right? Yeah. We are. And so for those deliveries, do they do it for you? No. You do it. So this is part of our. And we're talking about this cycle, this virtuous cycle. So we actually want to get people 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 franchisees, and it just keeps going round and round. So we're very, very, very certain that we will never have an aggregator deliver to us. Unless other crazy changes and we have to go there.
But we've been on aggregators for a long time in Japan. I think that everyone talks about the Uber. Well, Uber's only been here for, what is it? Three years? Maybe. Maybe three years. We've been on Rakuten. We've been on Demae-can for probably 13. So this is not new for us. So whenever I'm worried about this stuff, we sort of go, "Yeah. Yeah. We get it. We know how it works. Thanks very much." The driving price was higher as well. Sorry. Who was driving price? Price was higher at the moment. You know what it is? We see it as a place to play. It's an incremental customer from what we can see. It's another channel to go fishing in. And that's what you're thinking. I mean, Google's the ultimate aggregator. Why is that different from Uber?
The only difference is they can actually place an order, go straight through our stores, and we deliver it, so we own the process. We've talked about this to shareholders for about five years. We call it the average cost of delivery. We're not breaking it out individually. This is what we've been working on, and there's no way we would be starting our stores today if we hadn't worked because most of our business five years ago looked like it was up in the— We really beat them in and beat them and beat them.
To answer your question on the aggregator's cost, not only is the restaurant looking at prices, the aggregator's trying to make money, so you've got a service fee which existed two years ago and now exists. It's typically 10% of the order. You've got the delivery charge, which is going up.
In some markets, you've got a fuel charge and another charge. There's four charges. Fuel charge. Service fee. An employee charge. So you've got service fee, delivery charge, fuel charge, employee charge in some markets. Most markets are just service and delivery. But service didn't exist until now, 10%. If you reverse it out on all of your apps, 10%. It didn't exist. So you've got restaurants lifting prices, aggregators lifting prices. So the real cost basket is huge. I think 70%-75% increases for all those from Uber in Japan. And then what the beginning of this year and last year, what are those plans? Sorry. So we were overlooked there. Yeah. Yeah. I was about to say. So you're driving that sort of inflation across some of those scale chains, not you guys, but otherwise. Yeah. Yeah. That's right.
It's disturbing because it takes away the age of delivery if it goes too fast. The single biggest reason for the stop that we can observe is the age of delivery stops happening if cost of delivery becomes sub-economic. If people just can't afford to get it. We're in a recession in the U.S. or we're in wherever in the world. It takes away that growth. We want that growth because we want to go into that market and the market's bigger. Sorry.
Yeah. These are important points. I think also what happens with Uber and I mean, it's raining today, right? What first thing that happens? Territory shrinks. We've got our own drivers. Our territory never shrinks. We keep delivering. What happens to an Uber driver? They say, "Yeah. It's raining today. I'm not going out." So we get the benefit of that.
So there's so many different things going on in that space. But anyway, we'll try to answer everything we can about aggregators and as we go through. Yeah. We'll do a team. How many can be parked away at once? All these different benefits. I don't know where I'm up in there. Cost of delivery. So this is something that's really, really important to us. And we talked about making profitable orders. We know in Japan that we can't just tack customers who aren't delivering. This doesn't work like that, right? So how do you build trust? So how do you build a relationship? How do you build all those things? By just adding surcharges, high costs, large minimum orders, in the end, it just actually just erodes away the demand. So we know this in Japan because we have some of the lowest cost delivery in DPE.
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 the drivers or the CSR, the factor 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 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 align for us. And that's what we've been going after. It didn't just happen overnight. We've been talking about Project 3-10 for how long, Don?
Eight years? Nine years? We've already started that journey. We're well ahead of it. And we're still doing it. And 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 win in this space. That's actually it. Can you click it on? 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. When everyone was running in the other direction, we were standing up things that actually benefited our communities. Feed the Need was a huge one.
We're giving away pizzas left, right, and center, 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, it may seem strange 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, 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 a pleasure to see all these things. So where are we? We've got a, as you can see, 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. It's 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 open today. The end of the financial year is upon us. We're going to hope to open 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 you get to eat our product and get to chat to our managers and franchisees, of which some of them are in the room today who are about to chat to you.
Good afternoon, everybody. I will be the last speaker before pizza. So please don't fall asleep. Hopefully, everything is exciting 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 I started delivering pizzas just at 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 eight years, all in the south region of Holland. To give you an explanation of where I had my stores. Actually, it was in Eindhoven. Not sure everybody knows the city of Eindhoven. It's actually a tech city, but it's. Yeah. So it's also got a good soccer club there, but I wouldn't bother you with that information.
And then I became the head of operations in 2019. So I sold all my stores to a Holland franchisee and became a business. And then in 2021, Don just phoned me and told me, "Well, we are having another market, and maybe you should be in there." So yeah, I took the opportunity. And the funny part is, and I will tell you a little bit later on, is I've never been in Taiwan.
So this is actually the closest time I've been to Taiwan. So it's like a three-hour flight from here. And the reason is that Taiwan closed their borders roughly one and a half years ago due to COVID. And yeah, so I still can't get in. So I'm running the market now for nine months behind my laptop. So yeah. And so for the 1st of July or after the 1st of July, I'm transferring to Japan.
I actually never saw people in Taiwan in person. I definitely go to there in a few months after I'm transferred to here and have a farewell party or 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. The first store opened in Taiwan was actually in 1989. They started franchising roughly about 10 years later. It's been sold twice. In 2007, it's sold to the Formosa Group. They are also having the hotel chain, like the Regent Hotel, for example. In 2021 again, and that was to DPE. We started this on September 1st, 2021.
We are currently the second or the number two as we talk about store counts in Taiwan behind Pizza Hut, so just as a pizza chain. In some areas, we're actually number three. We're also a local player there. Napoli Pizza is there beating us at the moment, but. The same Napoli Pizza is here? Yeah. I'm not sure. No? No. It's just the same name, but it's a different one. Yeah. That's where we are at the moment in the system. I will talk to that a little bit later. Two warehouses at the moment. We have one in the north in Taipei City, and we have one in the middle of the country. It's in Taichung. It's an area, yeah, roughly a couple of hundred kilometers south of Taipei City.
Roughly around 100 people working at this moment in the head office and the corporate stores and as corporate staff members. Yeah, that's roughly about the team in Taiwan. What is the current situation? 166 stores, 167 at the moment. Yeah, what's the end game? I don't 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. This is my team, actually. 186 years of experience in total. Mainly driven by females. I think that's a good benefit of it. All those people here in the pictures, except for Joyce, who is our CFO, actually started in the store. Also, the commissary manager, Leo. That really helps when people start working in a store and then grow through.
Also, what Don told us, but also in the leadership team, when you have an experienced store manager who now becomes an ops director or actually also the marketing director starts in the store as well. 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 that Rebecca, in this case, has a long time of store experience herself. Yeah. So Gary now, he's not general manager, but he's now in charge of the development team. And yeah, the rest is here. And yeah, 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 four or five years. And the oldest one is roughly around 32, 33. And that's a really long time. My experience in Holland, for example, is the average franchisee is eight years, between eight and ten years in the system, and then they will leave. So it's even shorter than a 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 franchisee at the moment is 4.4. There is one 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 a franchisee as well. So 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? Sorry, 139,000 people average per store. 139. That's a number, in my opinion, we can decrease or which you can decrease as well in the future, right? Fortressing the stores, fortressing the area, carving out extra stores gives us the opportunity to. So if we look to the market and to 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. We are 95 behind.
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 nine months. So it shows that they hardly opened any stores in the last few years before we acquired the market. And so it was a market when we started. Okay. It wasn't used to opening new stores. To give you an example, the development department was only one person. And that one person was only doing maintenance in stores, so repairing things and etc., etc.
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 now ready for that number. But I would like 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, roughly around here, where there are hardly no stores, it's because this area is almost nature. So a lot of big parks, no cities. All the cities are here in the west side. And some here on 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 commissaries, so one is in the north in Taipei, and one is here in Taichung, and the commissary in Taichung is supplying these stores, and the commissary here is supplying the stores here in the north.
Domino's own the entire preparation chain, like the procurement of foods, the distribution. Is that all owned by Domino's?
In Taiwan, yeah. It is. Yeah.
Because in Australia, isn't that outsourced? They're a little different. Yeah. Different ones. So we make commissary dough in Taiwan. In Australia, you make it in the back of the shop.
Yeah. S o actually, the dough is prepared only in the north and then shipped to the commissary here and then shipped to stores. So it's not ideal, 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 a 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 in the north, and the poorer 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 a store in the north where there's 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 three-year plan from now. What are we going to do?
We are going to open, of course, some new stores, fill in the stores in current regions, and so also Fortressing strategy, especially in Taipei. At this moment, we are still behind Pizza Hut, 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 looks more like garages, which you saw in Japan as well eight years ago. We have to relocate them to better locations. 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 between three and five years in the system. So we need young, fresh blood in the system, people from corporate stores, but 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 innovations I will talk about a little bit later. The brand relaunch, which is also in there, and yeah, leverage DPE's digital experience to accelerate customer engagement and sales growth. This is also a very important part of us. Being part of the DPE family gives us the opportunity to use their platforms as well and to get more sales in there, 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 the end of November or mid-November, and mainly franchise stores.
So two of those 11 stores were corporate stores, and nine of them were franchise stores. We already filled in the stores of the—sorry, infill stores in current regions. We planned, which I was just talking about, the store relocations and growing our franchise base, and especially about the new plan 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, a brand relaunch by the end of April, so roughly about one month ago. And yeah, and already started with some ESG rollout, electric scooters, etc., 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 1st, and we would like to open new stores. We need our existing franchisee base to grow, right? So what have we done so far? We give them a royalty incentive to existing franchisees. If you open a store within the next two 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 copied 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 the Japan corporate system.
But we do that also for the franchise system. But we also give really good operating managers and really good operating supervisors in the system a boost. Okay. You are a really good operating manager in the 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 on short notice as well. How do we do it? We provide them a management contract. So we will build a store for them. And within the two years, they have to go to the bank and finance the store or refinance the store again. So in those two years, they should have enough equity to go to the bank for a loan and then start with that, and then rebuild that store or refinance that store.
Otherwise, this is the same model in Japan, the way we ran it two years. This is an incremental cost by igniting Australia's cost. That was an incremental cost. It's the same as the same name, but it's just trying to use Project Ignite. So if you click with us as well, that means a different thing to us. Really important.
Yeah. 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 the opportunity to start running a store as a franchisee. And also, the young guys were 18, 19 years old. I had the luck that my parents could help me starting my first store. But a lot of those people don't have those parents who can help them with. And this will give them the opportunity to start.
And I think that is a really good opportunity because if we provide that to them, we know for sure that they will stay a long time in our business. Good. The next one is a short video, 60 seconds, about a franchisee. He actually won a Golden Franny this year at the Las Vegas Rally, and he was the first. The Frannies are over here. And what is a Golden Franny? I will just explain it in short. If you win a Golden Franny, you belong to the 1% or 2% best-performing franchisees in the world. So not everybody wins a Golden 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. [Foreign language]. Look at the smile, right? It's really. I started working for him immediately. But this also shows that the franchisees in the system are now also adapting the way we are working and we would like to work, like with high volume mentality, etc. I will talk about it a little bit later. But I remember the first day I spoke to the franchisees was the first week of September, and I was thinking by myself, "Okay. I'm going to talk to them about high volume mentality, where they want to go and to grow, etc., etc." So I need at least one franchisee who is on my side just to roll out the system. Luckily, I got three. 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 the other franchisees are doing. So, wait, but more and more franchisees are willing to adapt 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?" The first meeting was three hands, and now we're six, seven, eight, 10 hands now are showing. That's really nice to see that it's 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. They were just looking to all the 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 Pizza. 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 part. We want to be here, right?
And 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 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 in this case, it actually helped us.
Sorry. That you buy your competitors. Pizza Hut's food is quite expensive there. And you guys are still the value player in pizza right here in Taiwan.
Yes. Sorry. Can you, I'm sorry.
Do you think that's Pizza Hut and your competitors creating that perception issue? Because you guys are still perceived as the value player in pizza in Taiwan, aren't you?
Yeah. Yeah. We are. So, well, actually, it was expensive and, I think Napoli Pizza would be the value player. Yeah. They definitely are lower priced than us. We are in line with Pizza Hut, I would say, for price. A little bit lower. Yeah. They would say that. But if you look at Napoli Pizza, their value, they're down all the way down there. They're almost half the price, but also half the quality and all the rest of it.
Pizza underperforms, though, as a rule.
Yeah.
These aren't high volume sort of things. All of Japan was too expensive. All of Taiwan was too expensive initially as you're going through this. There's no real absolute value players.
We see a product servicing which is part of our price. That's the big hole. That's what's so exciting.
Do you get a bit of a kick at the moment because of all the issues around all the chicken and just the bird issues in terms of people coming through the pizza category? Is that a positive in terms of getting people into the category?
The chicken issues in Taiwan with the bird issues, is that having a benefit to us in pizza? It isn't. Actually, chicken is really popular in Taiwan. Yeah. It's still very popular. But no shortages there at the moment, though. No? So much chicken going on. I don't know. We don't. It's unique in that we sell a fried chicken from a fresh fryer in our business. That's the only place in the whole world where there's fryers and a saucer. Yeah.
We—and that's another question. Yeah. It is. Yeah. By the way, we're not impacted. Our supply chain hasn't got any shortages for chicken, our supply chain. So yeah.
Talk about the value proposition you have in Japan. Sorry. So if we're coming from Australia, where your pizza is quite inexpensive, at AUD 5. Where do you see you are in Japan in terms of Taiwan? You're not the cheapest. Are you the cheapest in Japan? How do you think about that? Where does the chain fit, like, Pizza-La?
Yeah. So well, Pizza-La is probably the most expensive. So we sit below them. Pizza Hut and us, we sit depending on the size, right? So we eat pizzas probably different. We look at size. We look at this. We look at all sorts of things. We are inside of Pizza Hut, and Pizza Hut's above us. That's how we see it.
And then you've got the smaller chains, which have 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 us, Ben. Maybe even a bit more. 10% more than us.
Yeah. Independents? Because I mean, we're comparing, yeah, sorry. In A ustralia, we look at Crust independents. They're more expensive than Domino's. They're small and mid-sized chains. Same sort of thing. They're more expensive. Yeah. Generally.
There's another thing that's hollowed out in the middle of it. So 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. Carryout carries a lower ticket average.
It was diluting the average ticket while growing the average customer count, but then didn't have all the delivery costs in there as well. Then during COVID, there's been now a surge of delivery percentage. What's it? 60%/40% now-ish, something like that? 58%/42%? Yeah. Something around like that, depending on the prefecture. Delivery. 58%/60% delivery. We've sort of gone there and then pivoted again. We were creating a lot of high, well, it's not high street like Louis Vuitton, but what we call high street, coming from the garages to the main strips. The other thing in that era, we were lifting up our foyer sizes, and we've peaked at that now, right? We're starting to think about it the other way. Yeah. Definitely. We were going to 120-, 140 square meters sites, 150-, even bigger. Now what are we shooting for? 100 square meters?
100, 120. 80? Yeah. Yeah. Now, it's an oxymoron here. The number one reason you buy a pizza is it's a delivery. It's the nearest pizza shop to me. That's the first reason you buy from them. Now, it's got to be great price. It's got to be great service. It's got to be—so you can quickly dilute that 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 from delivery. But now we can do a high profile, which will start to shrink back because we're not going to do as much carryout, five, eight, nine, 10 years. Less maintenance, less operating costs. What Martin's 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 there and what was there as well. So it was Scott Oelkers who ran Domino's here, Scott Oelkers over there, and that's the way the business was 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's 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, isn't it?
As we sort of build that out and professionalize coupons, professionalize the menu offering, professionalize the stores and how they interact with customers. So.
Yep. Yeah. That'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 Hut isn't the best innovative company in Taiwan already. It should change in the minds of the customers. So we need to say farewell of our safe image, a safe brand that plays by the rules. And so we are saying, "Okay. What can we do just to get some room for innovation?" 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 not decrease it. Just say no delivery fee. So there was some fear with franchisees, but what happened if someone ordered just a can of Coke and asked for delivery, so we said, "Okay. If that happens, so if your minimum order amount is below X, we will compensate that." We did that for two months. We said we did it for two months. After one month, we evaluated. It was like 0.8 orders per store per week. We had an order lower than X. Not only a 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.
AUD 5? Yeah. Yeah. It's EUR 3. So roughly around AUD 5. And we got a lot of press with this. They were saying, "How are you doing this? Are you finding any—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 NTD 99 for a pizza." But we just do that for one week, right? We don't do it for every week. We do that like four times per year. A pickup, very good pickup order just to get new customers in. Get the rumor in the streets. We are here, NTD 99 for a pizza. No restrictions, NTD 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 a 1-kilogram cheese pizza, only for the 16-inch. So not for the 10-inch or the 12-inch, only for the 16-inch. But also start with the Quattros. We had Quattros 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% of our prime 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 Quattros introduction was good. We introduced lava cake, also very, the egg tarts. It's really popular in Taiwan. Actually, KFC is now opening a KFC in Taiwan, only selling egg tarts. So KFC is famous for their chicken, right? They're not selling their chicken.
They're only selling egg tarts and then the various varieties. But 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?" And then some cheese sticks here also. When you open the stick, you get like one cheese. And it's not performing that good. But let's see for the next few months what it will do. And we have to remove it or replace it for someone else. But the big help was the Quattro and actually the egg tart. But also the BOGO delivery week, right? We started it in April just for the test. Okay. All corporate stores are testing.
Some franchise stores, we do, "If you order two pizzas, you get one free." And they say, "Okay. Why are we doing this?" Because we are having 60% or 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 zero cases two 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's less people in the hospitals. And luckily, the government is not the same as in China, which says, "Okay. Let's reopen everything again." And that's not - so don't close the borders, for example. We're reopening the borders again.
So hopefully, within July, August, there will be no any quarantine for people who are entering in Taiwan again. So that 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 the market. It starts in July 2021. We are now currently at 69% of our app sales or 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 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 versus, yeah.
But also versus the other markets where we are a little bit behind in those percentages. Can you explain the tech to the Asian and the Australian ones? Not yet. No, not yet. Just about to launch the new first-gen iOS role. So we don't have any of the online digitals yet. No. 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. Then. We're just paying for that. Yeah. It gives us more data, more insights, and gives a lot more insights of what we can do actually with the market. Then the ESG mission and goals. Also in Team Taiwan, we introduced it. We introduced it a couple of months ago in March, actually. We start with Feed the Need in July this year.
We start with schools. We start with and why 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. The 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 mean? We have now a. We start with the person in July.
And their only responsibility is 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 gives them the opportunity to talk to that person. What's 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 there? Because a lot of people work from home with their children next to them. Yeah. 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 bicycles 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 paths, etc. So that's easier for us to build a new store there and start with bicycles. But 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 future plans? For sure, to become the dominant number one. But I just started my presentation with we are now number two, and in some areas, even number three. 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 open that much stores again. But yeah.
It's giving us an example of how to become a dominant number one 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 great investment through support from multiple markets. So we got the help, for example, from Todd Riley, who's 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, yeah, then I think that can help us also a lot.
And the investment, investing in growth, it's called. But we would like to invest in franchisees. So not only in franchisees, but also in potential franchisees. I think that's the word it should be. Investing in potential franchisees. Getting people more on board for the next five to 10, maybe even 15 years. So what do we do? Test and learn. In this phase, we are still in the test and learn phase. So we relaunched the brand. We tested that for seven months. And 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.
Yeah, that's, I think, gives us the good result in the end. How do we get there? High-Volume Mentality. I was talking about it starts with low volume mentality. It's now transferring to high volume mentality. Also the outgrowth Path to Excellence. It's a global training platform, which we start using in other markets as well in the next few months. Some new technology, but also customer lifetime value, CLV. Strategic marketing is not only copying marketing items from other markets, but actually strategic marketing. Fortressing the market. I just had a slide next after this. Motivated franchisees, of course. I think motivated franchisees start with high volume mentality.
If they see that their EBITDA growth is growing, I think a 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. 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 delivering under 10. Some stores are above, but the average is 13.77 for the best top 10 performing stores. Just here, this is the island I just arrived at. It's Sanchong and Luzhou District. There are currently six stores in this area. And we started with four. And those four stores were here in the bottom 10. We add two more stores here. And now they are here.
Here, Sanchong and Luzhou. They are now here. 60-minute average. So they come from 21-minute average to 60-minute average. Right? That's really impressive. And to give you another example, we acquired a market. There was an average of 25-minute delivery for the whole market. We are now roughly around 21 minutes. Some weeks, we're even below 20 minutes. Some weeks, we are even a little bit higher than 21 minutes. But average now is 21 minutes. And we only change it with some mentality. So we bring in some other mentality who'd like to be part of the top 10 or the bottom 10 because you're 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 2021. 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 of 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? You, Josh? And Stacey? So the question is that when the rebasing rolls in September, how confident are you of positive LFLs from October onwards?
Is that the question?
Correct. Considering all of the inflation around the world and that sort of stuff? Yeah.
Well, that's the question, isn't it? Look, we feel confident.
We look at this every day. This is not something that's creeping up on us, so my head is already there. My head's at Christmas. 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-shaped 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 monitor the two and three-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. Yeah. I mean, that would have a Pizza Rice Bowl or the Rice Bowl by itself? Either by itself or as part of a bigger order. Depending on where it is, 5%-8%. And what does success look like? Where do you want that to get to?
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 one transaction. And this is something we're trying to sort of get through our whole business is that we used to be transactional thinking. That's what everyone's head goes to. How many did you sell that day? 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.
Sure. And then last question that 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.
Yeah. It's a good question. And this is something we think about just about every day. And this is what Project 310 is for us. So it's fortressing. It's 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. An e-bike can park outside someone's apartment as opposed to a car that's got to go down the same way streets. Bikes can go the other way. So that's the other thing.
What we didn't put in these numbers is that Tokyo, when we started this journey to e-bike and maybe Kikuchi-san will be able to talk to you about this when you see it. But we've got around, Ben, is it about 55% e-bikes in Tokyo? Yeah. Yeah. And then 30% across the whole of Japan. Correct? Yeah. But how much do you get with the fortressing impact compared to e-bikes? Just trying to get a sense of the magnitude. Number one, it's the size of the territory. And fortressing is a generic word because sometimes, like I was trying to give that analogy of 2000 homes, sometimes we're just even trimming an area and there's no store to cover that area yet. So it's a rebasing of that area. It's a resizing of that area.
It doesn't always translate into a new store yet. Sometimes you cut it off early. When we look at our heavy users, our medium users, we can provide better service, better quality in those areas. 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 that cost, you might think about that's a win because you get a sale. But you're actually saying to all the customers in that golden mile or that area out there is that they're not as important. You actually make more money out of those people there because you do get all the different occasions. That CLV or that customer lifetime value of those people there is higher, higher. They're highly profitable as well.
Those ones that you've got to go all the way, they're not as profitable. So here's some of 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 to get a single delivery. And they're more likely to get a faster delivery. Now, if you put all that together, because sometimes it can seem like 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've got a single. The more likely you've got a faster delivery, which led to a higher Net Promoter Score, which then got you a Domino's fan. You started looking more at our coupons.
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 at we probably didn't get to them fast enough. We probably didn't do a single delivery. It was the second sometimes. And it just rewinds. Their 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 paid less and got better service because they were closer to the store. Does that ring a bit? There's an immense amount of data that we can continually correlate this down.
And we can also show the closer we get to you, the higher you'll get up the 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 interested in what the constraints are. Is it a cultural constraint around pizza? Is it a constraint around number of franchisees? Obviously, you're getting a lot more multi-franchisees. But can you not get more new franchisees in the system? What's 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. Think of, we've got 47 different prefectures, 47 different TV markets. Think of it like that. This is why I said scale matters. You've got to think about scale on a prefectural basis. We talked about. 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. If you look at Hokkaido, for example, 22 stores. We've got a mix of corporate and franchise. We put corporate in there to lead, to produce managers. Then it just takes some time 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 race 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've 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 said it earlier. We started in Tokyo, Nagoya, Osaka. Our whole cost base was built like that. If you'd 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-house dough. Both those two 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 to one national ingredient price, which meant that our corporate stores in Tokyo, Nagoya, Osaka went up as they went down to get to a better price, reduced the lower. Then, because we hadn't been there for that long, regional players had 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.
You've got to remember just relocating some from Tokyo to one of these far-flung areas. I mean, you can't do that in any case.
So you've got to start with that core, buil d from there, and build out. It's like if someone said to you, "You go to Mount Isa; 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 offload to franchise and recycle. Yeah. Okay. And then just you talked about growing the pizza category with your store rollout. Maybe I missed it, but I didn't see much on sort of the elements within QSR more broadly and how pizza's changed in our perception. That'll sort itself out. How do you think pizza's going in aggregate in Japan and Taiwan, I guess? Yeah. Well, you can see it's growing. I mean, just our chart alone shows that it's growing.
We do compare ourselves to sort of size of the QSR market. And then we also compare ourselves to size of the delivery as well. Both of those, we are smaller. And that provides the inspiration for us to know that there's a path forward here. So it's about sharing a 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.
Okay. Thanks. Josh, thanks for that. The presentation was great. Thank you very much. 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 growers.
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 2. You're not actually using Path to Excellence. And so just what do you think that actually means as you transition to a new training platform? Yeah.
Thanks, Cory. 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 sort of gives us a good idea of how they're feeling about the business and what they want to do. As I said, we've grown our network 15%. They've grown their network by 80%. Fujimoto-san's here as well. And he's going to be talking to you about how he's grown his business.
Make sure you get a chance to talk to him and 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 Kikuchi-san did and Scott Oelkers, who these guys dreamed it up. These are all the great things in our business. We think about Mammoth. Mammoth, for everyone in the room, was our original training program. It had a number of steps. We could prove that as people went through the steps, not only did we get the retention factors, but we actually got 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.
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 to a global because when you look at it, our business is 80%-90% the same regardless of where you are in the world. All the training is very, very similar. We'd 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's almost like just the step between. We planned 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 that's where it gets really exciting for us. And then we can prove that the content is having an impact on the business, NPS, Pathway 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'll 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 parts as well. That makes sense?
Sorry. Just before we move on from that point, Josh is obviously talking about the importance of Path to Excellence.
Don, recognizing the importance of Path to Excellence for the future, you've just appointed a person to the global leadership team. I don't know if maybe if you could talk a little bit about the color around how important you think it is.
Yeah. So just joining those two dots, exactly what Josh said is that Mammoth was an inspiration because we could watch in Japan the amount of 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 individual team member up on this whole journey.
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. What it does is it starts to say, "How effective is your training?" Because right now, sometimes training's 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 have different bolt-ons. 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. We look on the side and say, "Well, how come 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 their own 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 to Excellence, has now become a global team member. So we can make sure this engine, it's so significant, is right across the globe. He also has a second role, which is OKR. So people familiar with 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 shifting into an OKR mentality so that because we now live in a hybrid world, we are in offline, 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, "Well, how does the future of work look like?" And 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's 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 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.
Yeah. Well, we talk about 2032. That's what we tell the market. I mean, obviously, we've got internal goals that we'll want to get us there earlier. That's natural with that sort of business. The thing you've 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 and 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 each year. We've got to make sure we grow where we don't hurt ourselves. We've got 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 sites to go after. We've got to have 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 our whole strategy going forward. So we're still going to get to number one 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, we plan to be much faster t han that.
Are there regions that you're going to focus on? Do you have targets?
Yeah. This is actually. It's a bit more science than it's a lot of science versus art. TV's 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 Three TV, how do we get to Tier Two?" 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.
We're looking for new developments that we can go into. We've got pipeline even 18 months from now that we can see. That's another nice thing to have when you start orienting the team differently. One part of the team will run this way, and the other part will run more how do we open stores in the next three to six months? It's a nice little add for us. But we do look at prefecture by prefecture. Remember, scale matters. Think about 47 different New Zealands that we've got to get to scale up. It's quite a. 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. 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 of those two outsourcing and in-house and why you do it that way?
Sure. 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. Yeah? That you had to transport out, that potentially doors opening on the back of the truck and closing again and then opening again and then quality degraded over time. And the cost was just too high. Franchise P&Ls and even our P&Ls, our corporate P&Ls, just could not sustain it. So we had to go back of house. 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 there. 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 we've been 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 mixer 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.
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 a 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 need it to go. So that's a different hybrid model. It is third-party manufacturing. We don't own those assets. And it is cross-docked. So it's not a truck going directly out of the facility. It goes to another facility that then goes from 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 that Domino's works.
It's like a 50/50 or what? Is there a breakdown?
Yeah. About 250-300 stores that are back of house.
Part of this is growing from a history. So when you think of that Tokyo-Osaka-Nagoya business, the original founder of this company 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 it may reshape itself in the future. But right now, it's partly history that puts us here. Whereas all of Australia, New Zealand, and Germany is back of house and Denmark. All of France, Belgium is commissaries. Japan is the one big.
And it's all to do with history. Partly too, you've got to remember we bought a business we said would be 600 stores. And it changed so quickly with long contracts in the family business that produced the dough ball for us, if that makes sense. Then we overshot their curve as well. So the other reason to go back of house is they couldn't even keep up with our volume. And there's another factor to this. And we have spoken about this before, but I want to—this is an earthquake region. When you have one facility or two facilities supplying your whole business, you start getting pretty worried. Like I said, I like to sleep at night. Back of house dough actually helps us. So we don't have to shut. So if a 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 it.
Are the economics different with back of house? Are the margins different? How does that affect the business?
There's a labor component at a store, but they're actually better in, slightly better. Slightly better. It's a more complicated store to run because you're now building dough into the business. But the outcome on average is almost identical to the customer. Customers see a dough ball come in a tray to the front, and we stretch it into a pizza. But you see a slightly better margin, but there's more labor cost involved? No. Even with the labor, there's a slightly better margin.
After all the equipment, after everything, it's a little bit more profitable. But it is more complicated. So you bring more variability into your business for that saving.
I'm sorry. One more question, and I'll pass the mute mic. We don't have to. I wanted to understand how the reopening is affecting store economics. And you had the rebasing chart, right? To understand from that, this per-store sales fell, and you're expecting a V recovery, but the rebound didn't happen. So what's happening? Where are we now in that picture? What's going on at this point?
Well, as I said in the presentation, store profits are higher than pre-COVID. That's how we think about it. It did rebase. It went from here, went to here. And then we had to, then we had to unwind all the costs in our business.
We had to find a way to.
So you lost that solo dinner. Is that the idea?
Pickup customer. That was a carry-out. About JPY 1,000 customer, JPY 1,200. That was a carry-out customer.
You lost that with the reopening, but the rest of it's sticking. Is that essentially what we're saying? Okay.
Think about everything opened up at that one point. Every single option. Everything was sort of half-open, periods of close. Everything just went bang. 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 into work and then changes the way their
eating patterns happen. Just in terms of Taiwan, maybe Martin, you think about what Don was saying. I think 600 or 800 stores, Japan was market share gains only.
Is 400 stores the ambition, the milestone? Is that market share gains, or is that growing the category? Yeah. I think it's a growing category. 400? Y eah. Sorry. It's growing the category.
Unless pizza shrunk or somebody else shrunk. Yeah. 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 gain. If they shrunk, then you wouldn't be growing the market, right? You'd just be 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. Think about it this way as well. McDonald's uses the same marketing as Japan. Sorry, in Taiwan as Japan. They just voice over different. Predominantly, yeah. 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 was saying. He's saying, "Well, look, that's one way in. 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 apart. Barbell strategy, occasions. How do we answer all the little parts of that?
Get them through into the business, get them into our ecosystem to then start marketing to them, and then take them up the frequency funnel.
Is Taiwan higher, lower, or in line with Japan margins? I don't want to. I'm just curious around, should we anticipate when we think about. From the company level or store level? From the company. So we're trying to estimate. Pretty similar, so to speak. Pretty similar. Pretty similar. Perfect. Great. That sort of thing. And can you maybe just sort of talk about Japan payback, where it was for franchisees maybe on a pre-COVID, where it got to during the sort of adjustment, that phase, and then kind of where do you think it gets to? Conscious that. Yeah. I wish we had that number. Yeah. DPZ have got an ambition for paybacks below two and a half years.
I think that just got re-based at the worldwide rally. Japan is. So three years is the world target now. Three years. Yep. Okay. Three 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 to 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 that's 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'm just curious. Thoughts, what you can say on that. Well, they. That's a good point. Yeah. They went out as far as seven times at one point in the history. Yeah. Well, range of four, it's four to six. That's the aspiration you think you'll get to. No. That's where it is now. Aspiration's always better. Sure. Yeah. Yeah. Yeah. Yeah. Conscious that the challenge there is that that four could also include a period pre-September 2021. That's where we thought your profitability should actually be amazing during that time. Payback should have gotten a lot lower artificially or. Yeah. There was periods there where you were definitely down in the four. Oh, yeah. Absolutely.
We had stores down even lower than that. But averages as an average, yeah. 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 in 18 months to three years, and here it might be more like three to five years. Bigger markets. Bigger markets. Different stages in the chilling. Could we let this be before it gets cold? Nathan's eating it anyway, but we're all standing here having eaten since we flew in last night. Yeah.
What about 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 bigger picture scenarios, not a change for us today.
I don't think that's a funny question, but how much visibility do you have on your pipeline and digital equipment or supply-side delays globally with ovens and building all that sort of stuff? In terms of hypothetically, if there were delays wherever it was, does that push out the visibility you guys have got in terms of your pipeline of new stores and the demand?
It can do. It might be that there's a franchisee that was nine months down the pipeline, and they decided that they were going to stall and move.
I've got to, because of the current environment, I'm going to wait another three, six months. That could be then a lost opportunity nine 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. It can have a longer term. People might get more conservative.
Is your visibility short or lengthy over the last six to 12 months in terms of new store pipeline in terms of demand for franchisees' commitments?
That's a good question. I'm just thinking as a global framework, Nathan, but to Sam's point, is the uncertainty and volatility, is it, maybe people are a bit more cautious around committing to something six or 12 months out, or are they saying, "Well, look, we're saying there's a 35% lift in profitability per franchisee in Japan. Bang, we're still happy.
We'll commit to this for 18 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. That's part of our job, right? Is to shore up the pipeline to make people. To say to our franchisees, "We're sorting these things out. Here's what's going on. This is why you should invest now. This is a market share opportunity." That's how we think about the business. So there's a bit of convincing because we're all humans, right? We all go, "Oh, the war in Ukraine. What's going on?" So just thinking 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's going through this and everyone feels 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 stores? Look at the numbers through COVID. No one opened any 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.
Hedging of currency in some situations as it comes to Japan.
Can I maybe phrase this question in a different way? Previously, we've 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 want of a better word." And I think what 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. We've been a number of different oven contractors and finding solutions and getting approvals for different ovens, but we've 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 to roll for 30, 60 days through the next wave of inflation before then they push that button on that one. So it could push it out one month or two months. But you've already seen 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.
Can you say in January for example, I think from memory that your franchisee profitability was at least at one point up in May or in August?
Say that again. Sorry.
In January. In January, I think in the fall, you said you've already brought in the first or two-thirds of the inflation in 2023, and franchisee profitability's still up. Correct. That was in that window of time.
Yeah. And then now we've typically for us, because most of our contracts are six and 12 months, it's July, January, July, January. The separate things to that are things like energy contracts because franchisees sign their own energy contracts, and that's whenever they come due. There may be other wage impacts. For example, in Australia, first of July's 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. Last one of my questions is just over tech stack. Does the new web have Apple Pay? No. So the web has, but the app is running about six to eight weeks behind at the moment.
In terms of rolling out that tech stack, it's obviously Taiwan's going to be a little bit later. Japan, does that come on? I know there's a language difference because it sounds like it's quite obviously you're consolidating too in Australia, and it's probably a bit more collection. Does that get rolled out globally pretty quickly, or is that Australian first and then you?
Yeah. So Australia, New Zealand, and some of the smaller parts of Europe roll first, and then it backends quickly. But Japan is by far the longest. Japan's typically out by three months, four months from the rest of the business.
I was shocked on the point you made earlier about advertising. On the point you made about advertising and the margin opportunity there, as that normalizes the five percentage points or so, I think in theory you mentioned.
How much of that is a scale game, and how much of it is the rate in Japan for advertising higher than maybe Australia? And is TV the only primary market for advertising? I would have thought you'd be in all sorts of channels, but you keep referencing TV markets. I just want to understand the mix.
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 in front of the TV. It doesn't go away like these. So we're in every channel you can think of, but TV's still the biggest driver, and that's where most of the money goes. Right. And the rate per ad in Japan's not much different to what it would be in other markets relative to size. I don't have those numbers. Yeah.
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 and New Zealand where you buy it by market. Yeah. 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 it's 47 different markets. The other thing is 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 three times because the Americans came in, set up Sydney, and they kept bleeding, 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've 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.
Yeah. No, it makes sense. Final one for me just while we're 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?
Yeah. Well, it's pretty flat. I mean, it depends on where you are, obviously. There's some landlords wanting to claw back some profit or some lost rent.
We did a really good job 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 new sites, it 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 it just got to go into a bit of a normal cycle now, if anything. I don't think it'll be anything. I don't think it'll 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 inflationary 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's up 30%, just pass on 30%. That's what they'd love, right? And Domino's seems to be this pain because it doesn't do that. But that's because Domino's doesn't just do that. It's looking at its delivery costs. 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, "Oh, it's just too hard.
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, right, saying, "Well, if we're really pushing here, will we get some more of that?" Don't know that yet because that hasn't happened yet, but that's what we like to think about. But yeah, like you were saying before, then, 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 two stores in between that. You've got to drive through two more stores there to get to me. That's a lot of cost that you've got to pass on to the customer, which way are you leveraging that to?
Talking about store growth, in the first half, you opened 10% in January. What was special about that time? Because even your run rate, you're growing well in the second half.
You're talking about Japan?
Yeah. You're growing well in the second half, but you've slowed from that area.
We try to open before Christmas.
Okay. So we should think about a bit of seasonality.
Run into Christmas. Think about all that cash, 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
I thought Japan was actually quite a, I thought whereas other markets are very June, December. I thought Japan was quite a regimented, it just isn't more regular. I'm just trying to square that with the comments around.
Yes.
But it also still has a slight skew towards June as well. 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? We opened quite a lot of stores in June last year. And you'll see Australia will be heavier June than December because State of Origin and all the winter months. But Europe's the other way around. A lot of franchisees don't want to open into summer because summer's quiet. So open a brand new store and then go through the three quietest months of the year. So we'll still do well, but it's much better ramping into Christmas-like. It's probably your 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 three quietest months of the year.
Why is June big in Japan?
Sorry, what's that? Why is June big in Japan? But we're still opening?
Yeah.
Just the way they fall. It's not by any particular reason. Because it's our financial year too, pressuring a bit of it. It's a lot of our financial year, and then we keep rolling. 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 Kikuchi started coming in saying, "No, no, no. 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. We'll just keep rolling. And as Don said, we ramp up pretty hard towards Christmas as well. Just get those openings in. Some of these people are getting bonuses based on their full year. So it's those last few. Yeah. There's a little bit of that. With OKRs, I think we talked about briefly. I think that'll change and some of the other things that we're doing. So you'll see. Improve it. Yeah. Improve it at least.
Talking a bit about, you didn't explicitly point it out, but do you think you've gained share in QSR and in broader delivery over the last sort of three years? Do you think that was a maj or?
Not a broader delivery because delivery's 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 is because we've got to be able to put the—where we get those numbers from is their sort of pieced together of everything as well. It's just not something we'd put on the ASX. But we think that size of the delivery market has hit its peak.
You didn't think you'd grown with QSR?
Yes. In QSR? Yes. Yeah. I like to use this. Use them. I use this again. I don't know why. Yeah. Because it's getting recorded. I feel like I'm pretending with my kids here. Sorry, I can't hear you. Can you speak up in the microphone? I'll start singing my way. I'm trying to understand the post-COVID chart about how stores were stronger post-COVID. Yeah.
We just had this question. This is this chart. That one. That one. Yeah, so this one, I think we'd probably do that. If we had to do this again, we'd split that in half, and they're sort of by themselves, so, so I'm trying to get the 10% sales and 35% profit. Yeah, and that's right, that dividing line that you just drew. Yeah. Does that make sense now? Yeah. Is there a way to understand that or kind of what's, 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. I apologize. So on the left-hand side, the number one number refers to all system stores. So on the left-hand side, there's two ones relating to sales, average sales, and average, let me just take a second there.
So it's average customers and average sales for the entire country. For all of Japan. On the right-hand side, the footnote at the bottom refers to, over the same period, franchisee and P&L. Franchisee. Okay. Yes. Correct. So I should have put a line down the middle dividing those two. So the left-hand side is the entire system, and the right-hand side then is franchisee.
Have the margins gone up though, just in general? I mean, even separating those two 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. W
hat's changed? If you look at pre-COVID now, why are the margins higher?
Doing more orders, volume, and your marketing costs are down just a little bit.
Not enough yet, but they're down. So economies of scale kind of? Yes. Gotcha. 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. Right. Right. Gotcha. 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 t he idea? You're trying to build up, is that part of this?
It's one part of it. Yeah. 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 number one 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.
We're going to keep spending in this area. It sort of looked like initially it's a lot of corporate stores, and then over time you're shifting to franchisees, and by the end of the process, it's 100% franchise? No. It's not 100%. It's kind of a process or? Might be 100%. What we do is we look at where it makes sense for us to grow, where our base structures get leverage, and then we grow in those areas. Where it doesn't make sense, we might franchise those out. That's how it works. I don't see a corporate system that goes back to zero. It's too important for us to keep. The other thing is that it's such a high-performing corporate team. 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 it 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's been a very strong corporate. And Kikuchi-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, Kikuchi-san. I mean, have a chat to him and 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. I wouldn't want to. It's not part of our strategy to go, "No, we just franchise now."
The 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. It's already went a little bit because we're going to do the best in that era. You know what I mean? Rather than 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's not strong.
“We should make it corporate.” Rather than just make one-size-fits-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 franchise as far as it's two 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? We've seen our competitors close their shops when that happens. Well, we've always held it together. Yeah. So I'm sorry it's not as, when you look at our 10-year plan, yeah, it looks a little bit more like about 100, 100, 100. But in reality, it won't go like that. It might go 130, it might go 80.
It could look a bit more like that depending on what's going on with catching up. Did the ad fund roll in? Maybe one might 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. Because 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 franchise. We get asked that question all the time, and it's really hard for me to answer. So I'd probably go back to where our overhead structure makes sense. Tokyo, Osaka, Nagoya, probably corporate, more slanted towards corporate. Yeah.
Just for the economy of scale thing? Yeah. Absolutely. Size and scale. Remember, 47 different TV markets. You've got to get to scale. Tier Three, Tier Two, Tier One TV, leaflets in the letterbox, all those types 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 lead by example. So we say to a franchisee, they say, "I've got 20 stores. I want to have 23." And you go, "Yeah, but you've got five that are underperforming.
Let's fix those five before we go and do a few more." Well, then they look at you and go, "Well, you're a bit of a contradiction, aren't you?" And you go, "Yep." So we're also trying to live by our own. Because it's all human, right? It's all teams and, sorry.
Yeah. Bear in mind too, we will put franchisees in Tokyo and purely because we want to see we learn off each other. And this is the great thing. Even when we started, we've sold 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've got those two engines that are competing against each other trying to be better. I really like that tension in the business. Yeah.
Before I run from this phrase like these, the number of stores that franchisees get now, you've got a lot more, that's a more franchisee bucket. What's driving that? Is that the shift to the regions and where they're sort of taking hold of the big region in bigger chunks, or is there something else underpinning that? Experience. Do you want to talk to that?
It's a nine-year franchise.
Do you want to talk to that then?
Well, I mean, just to end there, we are focusing on bringing new franchisees in, but then expanding our existing franchisees. So I guess it's just the natural course of where we've come from. Since December 2019, we've gone from about 260 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 new guys coming in as well. We've also had franchisees like Fujimoto-san and Seno-san and a few other franchisees in and around Tokyo really build their portfolios up to sort of Fujimoto-san 22 stores for Seno-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 called the 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 executive teams, and you're seeing them all as the CEOs, and so you keep diluting the numbers down, and that hasn't happened in Japan because we haven't had any English-speaking or Japanese-speaking large franchisees yet, so as we've grown really quickly, those franchisees continue to grow. We haven't come and knocked on someone's shoulder, but one day, we might, inside the business, might say, "Look, we need a new, so this franchisee here come into the team DPJ," so that will probably happen at some point in our history, but it hasn't happened yet. I think one of the X factors for me is that we don't go external.
I think you're seeing this level of comfort with our existing franchisees to keep growing. That's a big difference. In Australia, we've gone external, and maybe that's one of the reasons. In Japan, we go only internal. You're dealing with people who just understand that. I mean, Fujimoto-san, how many years in the business? 15 years. 15 years. So 22 stores. You've got Seno-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. When you're talking 22 stores, it's a lot easier than an external who hasn't grown up in the system. It's actually a good thing because it de-risks it for everybody as well.
Josh, since he's here, I mean, I don't know if it's too sensitive to share, but would he be allowed to share his economics with us? I mean, I'm just trying to get a sense for like,
"Yeah, no." It's up to him, really, because it's his private business, so.
So I understand. I mean, you mentioned you sold off a few stores. I mean, those were two employees. And so what kind of - I mean, four-year payback was mentioned before. Can you unpack that a little bit?
We typically sell stores as a multiple of sales because a franchisee might run a different cost structure to the corporate business and vice versa. So what's the average weekly unit sales? Is it 24 in Japan? Ben? What's the average? What? I was. Yeah. Yeah. Sorry. Yeah. What do you sell the stores at now in Japan? Is it 24 times weekly?
That's 24-25. Yeah. But it varies depending on how profitable that store is. If it's an incredibly high AWUS store, well, it's 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'll be a lower multiple. Is it 24 times the what? Average weekly unit sales. Almost half a year, just under half a year's sales. That's surprising that you're telling them what kind of numbers they're going to make. 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 it, 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 it. We couldn't misrepresent ourselves like that anyway. For us to come in and say, "Oh, you're going to make this much money," we'll be in court every other week. So because it all comes, we don't guarantee that. To the feedback concept that was mentioned before, that was EBITDA, return on the original cost, cash on cash. Cash on cash.
Yeah. Fully managed. All the management in place. So it's literally after management.
Yeah. You got 7.84% for the marketing spend. Was it Germany that they looked into increasing for in Germany or in Japan? Germany and France every year vote, and the whole of Europe votes.
So the contract in Japan and in Australia is six, right?
In those markets, it's four. So we go out to them and say, "Here's a reason why you should do five or do six." That's the national advertising, which they call the NAF, the National Advertising Fund. We call it the ad fund in Australia. Then you've got local store marketing on top of that, which, depending on the contracts, it could be 2% or 4%.
So they're likely to spend more here because of the returns they're getting. Is that fair?
And it's because of brand immaturity as well.
Yeah, brand immaturity. So to some extent, this is pretty simplistic. You're buying some sales because you're trying to grow your market share. You're trying to do all that sort of stuff. So you can't compare it to Australia where it's at maturity, 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 bring the future forward, basically. So it's not a matter of just a collection average size for that shop. It's going to split those three with the 10% growth. It's a bit like it's that average for the marketing spend, which is sort of buying into the future. Makes sense. To get this kind of to drive the spark in the sales. Yeah. I don't know how to answer that. I don't know how to answer that either. If we're giving an Australian contract, 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 ad fund, and most of them spend 1%-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 to vote to spend a bit more from their contracts. And in here, it's been the history. When we bought the business, it was 13%. We've got it down in that 11%-12%. But franchisees are below that on average. So less than 12% of sales? Of sales. It's quite significant. Correct.
It's the biggest cost in the business that doesn't reflect 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 admittedly, the benefit is it's coming down. And franchisees have been able to achieve that. So they look at one of our stores that's running corporate, running, say, 11% advertising, and they probably look at it straight away and go, "Well, 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 I don't 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 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 a downturn store with different types of stores, where do you see the advertising marketing in terms of sales?
Good question. Down. But where? Lower. Lower. Yeah. Life doesn't work like a spreadsheet. So what happens is the CMOs walk in. I'll tell you. Here's the CEO, and there's a CMO in the room. CMO goes, "I need it. I've got inflation." "Yeah, but you just grew 15%-20%." "Yeah, but I need all of it because I want to buy more TV to grow more sales. Plus, I've got inflation." And they give you all the reasons in the world.
Meanwhile, the CEO's sitting there going, "Yeah, 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 argument. Sometimes the CEO wins. But that's the dynamics of a real company as you're running it. So I would say, can Japan get to 7%? 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. Well, Germany only runs 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 pizza consumption is high to start with. So you don't have to spend as much to provoke it, which is the question for Japan. Will you 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 would 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? Yeah. So I didn't mean to 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 are a bit of a triangle. They're all 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 being in a process, right? So we are opening corporate stores now. I think identical as in Japan.
So we are creating a pool of new potential franchisees. So we need some new energy in the group. We have a really, that's an old group who are there for 25 plus years. And we need a new group. And we have the new group already inside, but we need to train them, develop them. And then within six months from now, the first group can start, actually. So I don't see any barriers with creating new franchisees in the system within the next few years. It's very similar to Japan.
Yeah, very similar. Very similar. Even the way we open stores. Yeah. The same way the territories we open, they're not as locked, sort of locked into the territory. There's certain things that we can do around that. So there's not, it's like Australia and New Zealand, Japan, Taiwan, very, very similar. Very similar. Yeah. They're different, but they're similar.
I'm surprised. Our budget was six stores in the first year because we only had it for nine months. And you've got to wind up a pipeline. He's going to blow that away. Yeah. When we started in Taiwan, we had franchisees come out and gift us a store. They said, "I will open a store for you." And it was a bit of a surprise for us. It was like—and then it just kept on going. So 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 franchisee in that market, it's like, "Oh my gosh, I've never done this with volume." So you have to do these resets of expectations of what is a high volume. What would be the highest now in Japan order counts? Highest order counts for 12, 13, 14, 15 hundred? Yeah. And that is the national average for Australia. And that's the highest. So you've got to grow up into these. By the way, the Japanese menu is a lot more complicated. 60% of the pizzas are Quattro. They take longer to make. They're more premium, as you've seen. If you go at 100 orders, it freaks people out. It's a different labor model. It's like they've got to grow into it. It's like buying your kids' shoes. They're a six.
You buy them an eight, but they need time to get there. The 1,200s to 4,000s, that's kind of weak orders. Yeah. Yeah. We're talking about an example of a store, like a high-volume store in Japan. A few stores. Typically, Domino's targets 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 at that order count. So you're already at the break-even. 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 a. We're not going to add. We're not going to double the orders in three months. We're going to do this properly, do it in an efficient way. Otherwise, we'll kill the operation. It'll just die. We're only thinking about that store that's doing 1,300-1,400 orders per week because of the yeah, it's making more money. Time in market too. It's been there a long time. Very entrenched, well-operated, long history. Time and yeah. 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've 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 did DPE buy? 65. 65 stores. Average sales was between 4,000 and 6,000 euros. It was a really low-volume market. 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. Nobody in the room believed me. Nobody. Ronald, on the way out, and I'd met Ronald at a rally many years before, said, "Hey, Ronald, what do you think?" He goes, "I'm selling my stores. This is—." I went, "God, this is a great plan." By hook or crook, the first promotion lit off, and it was just like they got it.
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 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, per store? To a 10-minute drive time. That's five minutes both ways. 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. So 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 to come in. 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 your big drivers of new customers to your doors, right? It's not because we want to do it. I'd love to not do that, but that's where your new customers—and when you're pioneering pizza as an occasion, you have to spend a little bit disproportionately on those media. So I'm sure Fujimoto-san on that. We'd love to spend a lot less, but those are the things that drive new customers. And we've got to rationalize that in our business as well. We've got to challenge it.
That's it. Smaller territory, more customers in it, but then higher CLV per customer is the way to think about it. Customer lifetime value. Higher frequency. Yeah. Can you track that over time? Absolutely. Not only that, we even show franchisees individual customers. We'd pick them out and just go, "Look at this customer here. See if you're open at 1:00 P.M. to 11:00 P.M. last Wednesday." Let's say you shut the shop. You went, "Oh, a guy's walking in for an AUD 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's some managers who'd go, "Oh, sorry, we're closed.
We've already shut down the ovens." You might have just lost a AUD 1,400 customer this year, which could be a lifetime value customer in, say, Australia.
Can you tell us how far you are in that process of penetration and increasing frequency? Is your average Japanese consuming a tenth of the pizza as an average A ussie 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. We had a gentleman who was a private equity guy who we work with. We used to call him our chairman in France. His name is Jean-Marc Dahan. 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 service, we seem to just grow more consumption in that area, including still in Australia. I talked to you about these stores. When we go to the stores that have the highest NPS, that are doing these big volumes, and you're saying, "Why are they still growing 10%? 10%? 10%?" It's because they're just executing. I walk into Maryborough going, "How is this store doing AUD 60,000?" How many homes in Maryborough? 7,000 addresses, right? Then you used to look after that area. It's nothing. 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% on 10%, executing flawlessly, right in the middle of town, beautiful carve-out. You sort of say, "Well, it can't grow forever." That's what I believe too, but it hasn't stopped yet. So I don't know the answers to those things, but what happens if we do, by getting closer to the coast, continue to grow? I'll reverse it. The Netherlands is the best example. We go to the Netherlands. We're 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. 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 of it as Domino's experience. So when you're in the Netherlands, somebody will talk about Domino's. It's just amazing value. So good. Such good quality. It's such good. 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 70—what is it? Record in the Netherlands. I think it's 72? 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 70,000, they would have even all run for the doors going, "Guy's an idiot." 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.
I was trying to understand how you can tell us that. You asked earlier the question in terms of how many stores or how many people per store in the global population. The number is actually in Australia 35,000 people per house, per store, sorry, in Australia right now. There's a question about which slides you can throw in here.
But in a previous presentation, you shared that when you look at the target for Australia, it's 25,000 people per store right now. So current population, 25.7 million people divided by 1,000 stores, 25,000. So then the question is, well, can you get to that level of penetration? That's a big jump from 35,000 to 25,000. Well, the answer actually is in Queensland, which is our historic market. We reached that in 2019, and since then, we've opened more stores. So it clearly can be done in Australia. That's our most mature market. Can it be done in years? Are you aiming for?
No, I don't think we'll get to 25,000 in my time. Maybe Josh will. But if I'm here 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 put? I think we've got to know what we know. Max 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 break even 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 just happens to be the community.
Probably the highest volume stores to open, the newest ones in the Netherlands are all small towns now, aren't they? Yeah. Between eight and 12,000. Between eight and 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. I think the smallest is seven. Yeah. 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. Some of these numbers, someone says, "Could have 3,000 stores in Japan." That's speculation. 2,000's what we think we're going to get to, and we'll see how we go from there.
If you look at the consumption piece, right? The last five years, 10 years, which types of consumption have increased the most? Where have you had the most progress in changing habits or going from that Christmas-only party sort of thing they used to have, right? And what you're doing now, is it have particular success in certain types of consumption versus like solo dinners or whatever versus something else?
Yeah, it's pretty broad. What are they? 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 it's one or two people. You've changed buy one get one free to Half Price C arryout, which promotes one pizza consumers as well as three. So that then is quite broad in nature. So how do you work that out?
But I would say that we've had a dent - a pretty good dent - in meal as a task with pizza, rice bowls, and a few other things. But then also on the family side, the lunches over the weekend. We've got Big Wednesday, Big Sunday, and now we've actually got Big 3 D ays. So that's driving a lot more trials 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? Is it a city store, a regional store? How do you want to cut the data? It's the problem with averages. They just don't tell you the number. Clicker. Yeah. Yeah.
I lived in Japan since 1988. When I first came here, it's always pineapples and squid on pizza, which was just a travesty. So there's been some progress in maybe getting other toppings and things onto the pizza.
I just wondered if you've seen a generational change in behavior or just kind of what over time?
Well, there's 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 in authenticity from around the world in. So that's. He's on YouTube. He's bored. Yeah. So you've 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've 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, Jules 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? Yeah. Yeah, right. Yeah, right. So it's all, yeah, exactly. So that's the American toppings. You're getting an American pizza. And that's part of it. 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 it from around the world. You bring American, but you also bring local flavors in. And that's the trifecta. Is there a demographic you've had particular success with? It's a good question. I would say in Japan, normally if we take Australia or somewhere like that, we had this sort of narrow sort of view. We had sort of 18 to 29s. Is that about right? 18 to 24s, yeah. 18 to 24s. Here, it's much broader.
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 off us as they move through their age groups. So it's hard to say. Yeah. 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 clones.
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 they did the number three 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 400-500 more units in chain pizza in Japan than there was in a market that was shrinking. Was there a slight more investment in advertising, or what was it that turned the corner? 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 Fukuoka. Just didn't work, right? You had to bring the cost down to make it better pricing. More interesting menus. Better digital. We brought in OneD igital here. So that was. We had an old platform. But the question is 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's gone 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. What's the offers like Half Price Carryout, things like that?
What are the great consumption for sure. Yeah. Is Pizza Hut sort of tracking you there? Yes. In fairness, they did a 50%, didn't they, before we did Half Price? They did certain pizzas, 50% off and 30% off. Yeah. So it was a different sort of pricing model. Yeah. We can also put an ad up in Taiwan, which is the new brand ad. Is it? Is it? Because yeah. I guess maybe we can wrap with that, and then we can get everyone on the bus. On the bus and talk on the bus. We can talk on the bus. There is one bus. We can have the tour guide up the front to 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 ad.