The Domino’s effect
A look into Tom Monaghan’s journey in starting and eventually selling his Michigan-started billion-dollar pizza chain.

On December 24, 2941, Tom Monaghan’s father died of peritonitis. Earning only $27.50 per week, Tom’s mother was struggling to support him and his younger brother, Jim. She was forced to put them in foster homes with the hope of taking them back after graduating from nursing school and finding a good job. 

When Tom was six years old, he and his brother were sent to St. Joseph’s Home for Boys in Jackson, Michigan, which was operated by the Felician nuns. One of the nuns, Sister Berarda, greatly influenced Tom and later became his surrogate mother.

In 1960, Tom and his brother purchased a small pizza restaurant called DomiNick’s Pizza in Ypsilanti, Michigan, which became the foundation of Domino’s Pizza. Tom decided to team up with his brother to buy the restaurant since he needed the money for his school, so the brother borrowed $900 to purchase DomiNick’s, which was a pizzeria that sold sandwiches and other Italian specialties. After DomiNick’s original owner still wanted to maintain the rights to the name, the restaurant eventually was renamed Domino’s Pizza. By 1965, Tom successfully paid off all debts and was ready to start franchising the brand.

The brothers were only given a 15-minute lesson in making pizza from Dominick and after that, they were on their own. At first, the brothers struggled to keep up with the fast pace of the kitchen, especially because the menu offered many different options, including five different sizes of pizza. The restaurant was also small, which resulted in overwhelmed staff and many angry customers complaining about wait times and cancelling orders. 

Family feud

Within less than a year of buying DomiNick’s, Jim decided that being in the pizza business was not his strong suit. According to an article by Mashed, Jim did not agree with Tom’s idea to serve only pizza. He also was not happy with the long hours he was working and only receiving small profits, making Jim want out of the business.

Eight months into their partnership, Jim gave his half of the restaurant to Tom in exchange for him walking away with a used 1959 Volkswagen Beetle, which was the car they were using to make pizza deliveries. The Beetle was worth the equivalent of $12,000 today. If Jim had kept his 50 per cent share of the company, he would have netted almost half a billion dollars today. 

One man show

After earning just $99 in the first week, weekly profits soon grew to $750. Early on, Monaghan made strategic decisions to streamline operations and boost profits. Twice, when short-staffed, he removed six-inch pizzas and submarine sandwiches from the menu, realizing that focusing solely on regular pizzas made handling the rush easier. Each time he reviewed the numbers the next day, he found both sales volume and profits had increased. Simplifying the menu proved to be a smart financial move.

When he started franchising in 1970, Tom purchased 85 new delivery cars and hired an accounting firm to computerize the company’s bookkeeping. In 1983, their first international store opened in Winnipeg, Canada and by 1984, their headquarters were reestablished at Domino’s Farms in Ann Arbor, Michigan. 

Throughout the 1970s to 1990s, Tom’s wealth and prestige grew as he owned his hometown baseball team, the Detroit Tigers, a jet plane, helicopter, and an entire fleet of cars, including a handmade Bugatti Royale. 

Thirty minutes or less

In 1985, Domino’s promised customers that their pizza would be cooked in seven minutes and, on average, delivered to their door 28 minutes after placing an order. This wasn’t just an estimate, Monaghan was committed to speed. He encouraged franchises to offer free or discounted pizzas if deliveries took longer than 30 minutes. By the mid-1980s, this recommendation became a firm guarantee—any pizza that exceeded the 30-minute mark was free.

By 1984, the chain had a national success rate of 89 per cent which grew to 95 per cent in the last 1990s. A franchisee with 17 stores in Dayton, Ohio, set a company record by delivering 99 per cent of its pizzas within 30 minutes.

Domino’s downfall

In early June 1989, Jesse Colson, who was not wearing his seatbelt, fatally crashed into a pole while speeding to deliver a pizza. According to his girlfriend, who was also an employee, Colson did not wear his seatbelt on a few occasions to save time when he got out of the car at the customer’s home to deliver their pizza. In 1988, Domino’s confirmed it knew 20 people who died in crashes involving its drivers.

While Colson’s mother suggested the restaurant to stray away from the 30-minute or less delivery policy, the chain disagreed and said they did not ask their delivery drivers to speed or drive recklessly. 

Tom selling his ownership

In the early 1990s, Tom became more of a religious man and decided to turn his life around and sell his company. “I stayed up most of the night reviewing my life. As I did, I realized that a lot of the things about me that I thought were good—being competitive, driving for success, always trying harder than anybody else—weren’t necessarily that good after all,” he explained, according to an article by Mashed. 

Tom returned to his Catholic faith and even sold his baseball team along with his other expensive possessions. He told his ownership of Domino’s to Bain Capital for one billion dollars and has since been working in various philanthropic and charity efforts.