Domino's Effect to Come to University of Michigan as CEO Hits Campus

The departure of Domino's Pizza (DPZ) CEO David A. Brandon (pictured), expected to become athletic director at the University of Michigan in Ann Arbor, comes at a critical time for shareholders and Michigan fans alike. Brandon, it was announced today, will be replaced by Domino's USA president J. Patrick Doyle effective March 7, and will become the company's non-executive chairman.%%DynaPub-Enhancement class="enhancement contentType-HTML Content fragmentId-1 payloadId-61603 alignment-right size-small"%% Brandon, a former University of Michigan trustee, has his work cut out for him: the school's football team has just suffered its second losing season in 42 years, and the program is under investigation by the National College Athletic Association.

Brandon, a defensive lineman under legendary Michigan coach Bo Schembechler, summoned the can-do spirit that he used to shake up Domino's. "We sing about being the champions, the leaders of the best, and that's what we want to be," ESPN says Brandon said at a press conference.

Top among Brandon's priorities: reaching a settlement with the NCAA. The Detroit Free Press reports that former and current Michigan football players said they were forced to spend more time than NCAA rules permit in off-season workouts, in-season practices, and summer scrimmages. The NCAA sent Michigan a "notice of inquiry" in October, suggesting it has found evidence of violations.

Ailing Brands

Like Michigan athletics, Domino's is also based in Ann Arbor -- and is also trying to recapture its former glory. Under Brandon's leadership -- he joined the company in 1999 -- the chain opened more than 2,600 stores worldwide. Owned by Bain Capital, Domino's has 8,886 franchised and company-owned stores in the U.S. and more than 60 other countries, and the company doubled its enterprise value during that time to more than $2 billion.

But critics have long complained that Domino's has lost the appeal that once made it a favorite among college students. Domino's is revamping its online ordering system, creating what the Ann Arbor News calls the largest pizza-industry portal, hiring 30 staffers to oversee the technology project. About 20% of Domino's orders are placed online.

And complaints about the quality of the pizza led Domino's to announce in December that it would change "every part" of its core recipe and introduce the new, improved pies on December 27 with an ad campaign.

Thumbs Up From Investors

Investors are betting that earnings will improve, boosting Domino's shares up by more than 68% over the past year -- even though pizza orders are down, possibly out of concern for the economy. Domino's shares outperformed rival Papa John's International (PZZA), which rose 29% during that period.

Brandon, the company says, is behind much of the success with investors. Both Domino's and the University of Michigan hope their customers feel their best years are not behind them. Doyle and Brandon have their work cut out for them.

Read Full Story