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When looking at the income statement for both Papa Murphy’s and Dominos we notice how different the two companies are when it comes to operations. What is wrong with Papa Murphy’s is that their competitors such as Dominos have a supply chain account which allows the Dominos to receive a gain on sale from just selling the ingredients to their franchisees. Dominos and Papa John’s has also been able to franchise beyond the U.S border which is something Papa Murphy’s has not been able to do. Papa Murphy’s has put itself in a position where the company misses out on potential revenue from their franchisees by not selling ingredients directly to them and also not expanding beyond the US and Canadian border. Murphy’s only has four accounts on the income statement that brings in revenue with all of them
having some sort of expense account linked to them. When we look at Dominos, the company has five accounts that generate revenue without any expense accounts to link to them. When looking at the profitability ratios for Papa Murphy’s and compare them Dominos we can immediately notice the profit margins for the domestic and foreign franchise stores. Papa Murphy’s has an 88.8% profit margin for 2018 for their franchised stores and a 4.7 profit margin for the company-owned stores. When we look at Dominos, they have a 100% profit margin for all franchised stores which includes domestic and foreign franchise stores. One factor I believe is also unappealing the Papa Murphy’s does is that they don’t give you an option to have the store bake your pizza for you. The purpose of ordering pizza is for convenience. When I order food for take-out I expect it to be cooked. I believe one change that they could apply is to have some ovens installed in the stores. If individuals want their pizza baked prior to pick up they should have that option. Through my personal experience, it always
disappoints me when I’m out with friends and we want to get pizza from Papa Murphy’s just to remember that we have to bake it at home. I understand the marketing behind the idea of having a home-baked dinner and its purpose to be more family orientated. As a business, Papa Murphy’s
needs to focus more on bringing in more revenue and attracting more customers, and one way they could compete with their competitors is by having precooked pizza ready to go. The company also must modify its franchise process and attempt to replicate Dominos and Papa John’s the company should consider proving the franchisees with the necessary products to make
the pizza for a way to generate more revenue instead of having a third party. The company must also consider moving beyond the U.S border but only after they become more efficient with their
franchised stores in the U.S.
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