DP Poland to acquire Pizzeria 105 in £8.5m deal, expanding Domino’s presence in Poland

DP Poland PLC, the operator of Domino’s pizza restaurants in Poland and Croatia, has announced a major strategic acquisition aimed at accelerating its market expansion. The company has acquired Mastergrupa sp z.o.o., which operates under the brand Pizzeria 105, a well-established franchised pizza chain with 90 locations across Poland. The transaction, valued at PLN 42.3 million (approximately £8.5 million), is expected to fast-track DP Poland’s efforts to strengthen its presence and transition to a more capital-efficient, franchise-driven business model.

What does the acquisition of Pizzeria 105 mean for DP Poland?

This acquisition is a crucial step in DP Poland’s long-term strategy to grow its network of Domino’s stores across Poland. The company has set an ambitious target of operating 200 Domino’s locations by 2027, with a longer-term vision of surpassing 500 outlets. By integrating Pizzeria 105 into its portfolio, DP Poland gains access to 31 new Polish cities, significantly widening its footprint in a market with increasing demand for branded quick-service restaurants.

One of the primary motivations behind the deal is DP Poland’s strategic shift towards a capital-light franchising model. Following the acquisition, more than half of its locations will be franchise-operated, reducing the company’s direct operational burden while leveraging the expertise of experienced franchisees. The transition aligns with global trends in the quick-service restaurant sector, where franchise-heavy models have proven to be more scalable and profitable.

How does this acquisition impact DP Poland’s financial outlook?

Pizzeria 105 has consistently demonstrated strong financial performance, making it an attractive acquisition for DP Poland. In FY2024, the chain reported revenues of PLN 8.5 million (£1.7 million), marking an increase from PLN 7.1 million (£1.4 million) in FY2023. Its franchised stores generated stable system sales of PLN 153.8 million (£30.8 million) in FY2024, up from PLN 118.6 million (£23.7 million) the previous year. The brand’s EBITDA also rose to PLN 5.0 million (£1.0 million) in FY2024 from PLN 4.4 million (£0.9 million) in FY2023.

DP Poland anticipates that the acquisition will be immediately earnings accretive, meaning it will contribute positively to the company’s bottom line from day one. The integration is also expected to unlock synergies in procurement, distribution, technology, and marketing, which will further enhance profitability in the long run.

The company has been actively raising capital to support its aggressive expansion. In April 2024, DP Poland successfully completed a £20.5 million fundraising round to finance store refurbishments, digital investments, and debt repayment. With the latest acquisition, the company now expects to end 2025 with approximately 150 stores—20 more than initially projected—setting the stage for further expansion to 190 stores by the end of 2026.

How will franchisees benefit from joining the Domino’s network?

The acquisition brings 76 experienced franchise partners under DP Poland’s umbrella, each of whom will gain access to Domino’s globally recognized brand, high-traffic online ordering system, and extensive marketing support. Pizzeria 105’s franchisees will benefit from the company’s established digital platform, which has been instrumental in driving online orders.

Currently, only 16% of Pizzeria 105’s orders come from digital channels, compared to over 50% for Domino’s stores in Poland. By integrating these locations into Domino’s ecosystem, DP Poland expects to significantly boost sales volumes and customer engagement.

Moreover, Domino’s franchise model emphasizes high-volume sales, operational efficiency, and targeted marketing. Franchisees who previously operated under Pizzeria 105 will now have access to a more robust supply chain, benefiting from centralized procurement and distribution that reduces costs and improves margins.

What challenges could DP Poland face in rebranding Pizzeria 105 locations?

While the majority of Pizzeria 105’s locations will transition seamlessly into the Domino’s brand, around 30% of the stores face territorial restrictions that could complicate rebranding efforts. To address this, DP Poland is exploring the possibility of merging some Pizzeria 105 locations with existing Domino’s corporate stores. The company has allocated PLN 13.1 million (£2.6 million) to fund the rebranding process, covering expenses related to signage, marketing, and franchisee training.

DP Poland expects minimal one-time integration costs, but successful execution will be key. The company will need to manage franchisee expectations, align store operations with Domino’s standards, and ensure that customers in new markets quickly adopt the brand.

How has the market reacted to DP Poland’s expansion strategy?

Investor sentiment towards the acquisition has been cautiously optimistic. Following the announcement, DP Poland’s stock (DPP.L) experienced a 7.1% increase, reaching 9.75 pence per share. However, the stock has faced a 23% decline over the past year, reflecting broader market volatility and concerns about execution risks.

Industry analysts believe that while the acquisition strengthens DP Poland’s competitive position, the integration process will be a critical factor in determining long-term financial benefits. Investors are closely monitoring how quickly the company can scale up sales at the newly acquired locations and whether it can successfully maintain the strong margins that have historically been a hallmark of the Domino’s brand.

Is DP Poland’s stock a buy, sell, or hold?

Given the strategic importance of the acquisition and the positive market response, analysts currently suggest a “Hold” position for DP Poland’s stock. While the deal enhances the company’s growth potential, investors are advised to wait and assess the success of the integration before making further investment decisions. If DP Poland successfully executes its rebranding and expansion strategy, the stock could present a compelling opportunity for long-term growth.

For now, investors should watch key performance indicators, including sales growth at the converted locations, franchisee retention rates, and improvements in digital sales penetration. If these metrics show strong upward momentum, DP Poland’s stock could become an attractive buy.

What does this mean for Poland’s quick-service pizza market?

The acquisition marks a significant shift in Poland’s competitive pizza landscape. Pizzeria 105 was the country’s fourth-largest pizza brand, and its integration into the Domino’s network consolidates DP Poland’s position as a market leader. This increased market concentration will likely give Domino’s greater control over pricing and customer engagement strategies, positioning it to compete more effectively against independent operators and other multinational chains.

By expanding its footprint and increasing brand visibility, DP Poland is moving closer to its long-term goal of making Domino’s the dominant quick-service pizza brand in Poland. With enhanced marketing capabilities, improved supply chain efficiencies, and a rapidly growing digital presence, the company is poised for sustained growth in the years ahead.