Domino's Pizza Germany's gobbles up Hallo Pizza

Domino's Pizza Group has snapped up Germany's largest pizza chain Hallo Pizza into its local franchise joint venture.

The Daytona JV, which operates the Domino's master franchise in Germany, will pay €32m on a cash and debt free basis and expects to spend an additional €20-30m of costs over the next two to three years to finance store conversions and other transaction costs.

The largest independent pizza chain in Germany, Hallo Pizza operates through 170 franchise stores throughout the country, generating network sales of €80.2m and normalised EBITDA of €3.5m last year.

Adding Hallo will increase the Domino's store count in Germany from 209 to approximately 300-340 following brand conversions, with management targeting an eventual 1,000 store target.

"The transaction is also expected to improve the profitability of former Hallo Pizza stores and existing Domino's stores for both franchisor and franchisees as stores are converted to Domino's and national advertising campaigns, social media initiatives and IT innovations are leveraged over the larger store network," the company said in a statement on Thursday.

The deal is expected to complete in the first quarter of 2018, with the franchise contracts to be switched over to the Domino's brand over the next 2-3 years.