The Homeless Man Who Created Domino's with His Last $15

Summary

The transcript narrates the rags-to-riches story of Tom Monaghan, the founder of Domino's Pizza. Born into hardship, Monaghan overcame a tumultuous childhood, homelessness, and multiple career setbacks to revolutionize the pizza delivery industry. His innovative approach to franchising, delivery, and packaging transformed a struggling store into a global billion-dollar empire, with Domino's becoming the world's largest pizza delivery company.

Takeaways

• 🍕 The founder of Domino's, Tom, started with an unwanted pizza store and turned it into a billion-dollar empire.
• 🏠 Tom was born into hardship, experiencing homelessness and foster care in his early life.
• 👨‍🍳 He had various jobs from a young age, showing entrepreneurial spirit and a knack for improving efficiency.
• 🎓 Despite wanting to become a priest, Tom's path took a different turn after being expelled from the seminary.
• 🚀 Tom's time in the Marine Corps was pivotal, where he developed resilience and a vision for building an empire.
• 💡 A pivotal moment in Domino's success was Tom's decision to simplify the menu and offer free delivery.
• 📈 Tom faced financial struggles and homelessness but persevered, eventually turning a loss-making store into a profitable one.
• 🔄 After initial failures, Tom learned from his mistakes and adapted his business model, leading to rapid growth.
• 🏢 The introduction of the 30-minute delivery guarantee was a game-changer, setting Domino's apart in the pizza industry.
• 🌐 Domino's expanded globally, with Tom's innovative ideas and business strategies propelling it to become the world's largest pizza delivery company.

Q & A

What was the name of the founder of Domino's and when was he born?

The founder of Domino's was Tom Monaghan, and he was born on Saint Patrick's Day in 1937.

Why did Tom's mother place him and his brother into foster care?

Tom's mother placed him and his brother into foster care because after their father passed away, she could no longer afford to raise them on her own.

What was Tom's first entrepreneurial idea?

Tom's first entrepreneurial idea was to create a machine to shake down cherry trees and catch the cherries in a tarp to make the process more efficient.

How did Tom end up homeless during his early days in the pizza business?

Tom became homeless because the pizza store he bought was losing money every week, and he couldn't afford to pay his rent, so he had to sleep in the store.

What was the turning point that led to the profitability of the first Domino's store?

The turning point was when Tom decided to limit the types of pizzas they made, which resulted in their most profitable night ever. He then focused on keeping the menu simple and delivering for free.

Why did Tom change the name of the store from 'Dominic's' to 'Domino's'?

Tom changed the name to 'Domino's' because the former owner of the third store called and said he couldn't use their name anymore due to customer confusion.

What innovative packaging did Tom introduce to solve the issue of keeping pizzas fresh during delivery?

Tom introduced a corrugated paper box with holes to strengthen insulation and retain heat longer, which helped keep the ingredients moist and the crust crispy.

What was the ambitious goal Tom set for Domino's expansion in 1969?

Tom's ambitious goal was to open a new store a week by 1969, and he nearly met that goal with 32 Domino's stores open.

How did Tom manage to pay off his debt and lawsuits after almost going bankrupt?

Tom managed to pay off his debt and lawsuits by committing to pay his creditors one at a time, focusing on keeping the business open to generate the necessary revenue.

What policy did Tom create that significantly boosted the growth of Domino's?

Tom created the policy that if customers didn't receive their order within 30 minutes, it was free. This policy, along with other innovations, helped Domino's grow to over 5,000 stores.

How did Tom's early life experiences influence his approach to business?

Tom's early life experiences, including his time in foster care, various jobs, and periods of homelessness, instilled in him a resilience and an entrepreneurial spirit that he applied to building Domino's into a billion-dollar empire.

Outlines

00:00

🍕 Early Struggles and Entrepreneurial Beginnings

The script introduces Tom Monaghan, the founder of Domino's Pizza, who was born into hardship and faced numerous challenges in his early life. After his father's death, Tom and his brother were placed in a foster home. Tom's entrepreneurial spirit was ignited early, as he sought work and devised innovative solutions to problems, like creating a cherry-picking machine. Despite his mother's efforts to provide for him, their relationship deteriorated, leading to Tom's return to foster care. His life was marked by a series of difficult jobs and a desire to succeed, which was evident in his various endeavors, from selling newspapers to fishing and selling his catches. His dream of becoming a priest was short-lived, and after being expelled from the seminary, he faced further family discord, leading to his placement in a juvenile delinquent home. Despite these setbacks, Tom's determination to succeed remained unshaken.

05:01

🚀 From Homelessness to Building a Pizza Empire

The narrative continues with Tom's journey from homelessness to building a billion-dollar pizza empire. After losing his savings in a failed investment, Tom hitchhiked to Ann Arbor and worked as a newspaper supervisor. He scraped together enough money for college tuition but dropped out due to financial constraints. His entrepreneurial spirit led him to sell newspaper subscriptions and eventually, with his brother Jim, purchase a struggling pizza store called Dominic's. Despite initial challenges, Tom's innovative approach to simplifying the menu and offering free delivery turned the business around. His decision to limit the types of pizzas and focus on delivery proved profitable. Tom's ambition grew, leading him to open a second store and eventually rebrand as Domino's. His innovative ideas, such as the introduction of a corrugated pizza box with holes, revolutionized the pizza delivery industry.

10:01

📈 Overcoming Setbacks and Achieving Global Success

The final paragraph details Tom's challenges and eventual triumphs in expanding Domino's into a global franchise. After attending a franchise seminar and meeting industry giants like Ray Kroc, Tom set an ambitious goal of opening a new store every week. Despite facing significant debt and near bankruptcy, Tom's determination led him to restructure his business model, eliminating initial franchise fees and focusing on quality and customer service. His innovative 30-minute delivery guarantee further propelled Domino's growth. By 1983, the company had over a thousand stores, and Tom's vision had transformed a single pizza store into the world's largest pizza delivery company, with a presence in more than 85 countries and a value of nine billion dollars. The story concludes by highlighting Tom's journey from an orphan with bad luck to a successful entrepreneur.

Keywords

💡Entrepreneur

An entrepreneur is an individual who creates and operates a business, often taking on financial risks to do so. In the video, Tom Monaghan is portrayed as an entrepreneur who started with a small pizza store and eventually built it into a billion-dollar empire, Domino's Pizza. His entrepreneurial spirit is evident in his innovative ideas like free delivery and the development of a pizza box with holes to keep the crust crispy.

💡Franchise

A franchise is a business model where a parent company allows entrepreneurs to operate a business under its brand and system. The video highlights Tom's decision to franchise Domino's as a key strategy for rapid expansion, inspired by industry leaders like Ray Kroc from McDonald's. This business model allowed Domino's to grow from a single store to over 5,000 locations globally.

💡Innovation

Innovation refers to the process of introducing new ideas, methods, or products. Tom Monaghan's innovations in the pizza industry, such as the corrugated pizza box with holes and the 30-minute delivery guarantee, are central to the video's narrative. These innovations not only improved the customer experience but also became industry standards, contributing to Domino's success.

💡Risk

Risk is the potential for loss or injury in the face of uncertainty. The video script describes Tom taking significant risks, such as investing in a failing pizza store and expanding into new locations despite financial challenges. His willingness to take calculated risks was instrumental in transforming Domino's into a successful business.

💡Adaptability

Adaptability is the ability to adjust and respond effectively to change. Tom Monaghan demonstrated adaptability by pivoting from his initial goal of becoming a priest to embracing the challenges of the business world. He adapted to setbacks, such as losing his initial investment, by finding new opportunities and strategies to grow Domino's.

💡Debt

Debt refers to an obligation to pay a sum of money that is owed. In the video, Tom finds himself in significant debt after nearly all of his franchise stores fail, leading to a financial crisis. However, he manages to overcome this by changing his business model, demonstrating resilience and financial management skills.

💡Homelessness

Homelessness is the state of not having a home or permanent residence. The video recounts Tom's period of homelessness, where he had to live in his pizza store due to financial difficulties. This period of hardship underscores the challenges he faced and overcame on his path to building a successful business.

💡Delivery

Delivery in the context of the video refers to the service of transporting goods, such as pizzas, from the seller to the buyer. Tom Monaghan's focus on delivery as a core service set Domino's apart, with the introduction of free delivery and the 30-minute guarantee. This emphasis on convenience became a cornerstone of Domino's business model.

💡Empire

An empire typically refers to a group of territories under a single ruler or sovereign power. In the video, the term is metaphorically used to describe the vast and successful business that Tom Monaghan built from a single pizza store. The 'billion-dollar empire' signifies the scale and impact of Domino's Pizza in the global market.

💡Orphan

An orphan is a child who has lost one or both parents. The video script begins with Tom being described as an 'unwanted child' and later an orphan, which sets the stage for his rags-to-riches story. His background as an orphan adds depth to the narrative, highlighting the adversity he overcame to achieve success.

💡Strategic Thinking

Strategic thinking involves setting goals, developing a plan, and taking actions to achieve those goals. Tom's strategic thinking is evident in his decision to focus on delivery, simplify the menu, and implement the 30-minute guarantee. These strategic moves were crucial in transforming Domino's into a leading pizza delivery company.

Highlights

Tom Monaghan, the founder of Domino's, was born on St. Patrick's Day in 1937 and experienced a challenging childhood including periods of homelessness.

After his father's death, Tom and his brother were placed in a foster home due to financial struggles.

Tom's entrepreneurial spirit was evident from a young age, as he sought out jobs and thought of innovative solutions like a cherry-picking machine.

Despite a strained relationship with his mother, Tom's determination led him to apply to a seminary to become a priest.

Tom's dream of becoming a priest ended when he was told he didn't have a vocation and was kicked out of the seminary.

He joined the Marine Corps, viewing it as a way to improve himself mentally and physically, and to handle any future challenges.

After losing his college tuition in a failed investment, Tom hitchhiked to Ann Arbor and started working for a local newspaper.

Tom and his brother Jim bought a struggling pizza store, Dominic's, which would later become Domino's.

Facing homelessness, Tom lived in the pizza store and innovated by simplifying the menu and offering free delivery.

Domino's became the first pizza store to offer free delivery, a strategy that significantly boosted its sales.

Tom's innovative thinking led to the development of a corrugated pizza box with holes to maintain pizza quality during delivery.

Domino's rapid expansion led to financial difficulties, with Tom accumulating $1.5 million in debt.

Tom regained control of Domino's from the bank, which had worsened the company's financial situation.

A new franchising model requiring no initial fee and a year of store management led to Domino's resurgence and growth.

The '30-minute guarantee' policy, offering free pizza if not delivered on time, became a hallmark of Domino's service.

Domino's reached a milestone of over 5,000 stores and became the world's largest pizza delivery company.

Tom Monaghan's journey showcases how an orphan with a series of setbacks built a billion-dollar pizza empire.

Transcripts

mr trump here you go up three media

pizzas five dollars each

i'll tell you what i'll counter that

offer with an even better one here's the

deal

you give me those three pizzas only i'll

give you

just five dollars a piece

sure okay

still got it donald still got it

the dominoes we know and love today has

become a billion dollar empire

but before it joined the ranks of

mcdonald's and kfc

it was an unwanted pizza store that

changed when the founder went from being

homeless to the genius behind delivering

for free

the unwanted child

in 1937 tom was born on saint patrick's

day in ann arbor

when tom was just four years old his

father passed away on christmas eve

without their father tom's mother could

no longer afford to raise her own kids

she placed both tom and his brother jim

into a foster home

on the first day at his new home tom got

into a fight

he longed day after day for his mother

to return

nearly seven years later tom's mother

had become a nurse

and was able to provide for her two sons

she moved the family back to traverse

city where tom started school at tom's

new catholic school

he met father russell pasino he was

aware of tom's family situation

and gave tom odd jobs to do around the

school and church for 35 cents an hour

after the seventh grade tom moved

schools

he was still keen on working and decided

to look for an opportunity by walking up

and down the main street of his town

he later found a job selling newspapers

and a summer job picking cherries

the work was hard and tedious he

remembers thinking that the business

would be more efficient if they made a

machine to shake down the trees

and catch the cherries in the tarp it

was the first

instance where he started thinking like

an entrepreneur

to make more money tom would go fishing

and then sell his catches door to door

while thinking of other ideas as his

carefree and entrepreneurial spirit grew

his relationship with his mother

withered they constantly argued until

his mother decided to put him

and his brother back into foster care

tom moved from one farm to another and

ended up getting a job at a bowling

alley

he worked from 6 30 until midnight five

days a week

by high school tom moved again but this

time

into a ramshackle farm that had no

electricity

during the winter time frosts and light

peered through the cracks of the walls

life was difficult the clothes tom wore

were worn out and filled with holes

and his shoes were always covered in

manure while walking to school

he would keep his feet to the floor

hoping no other students would notice

one day he started to reflect on his

path while shoveling a pile of manure

that reached his ankles

how did i get so off track

it was then that he decided that he was

going to fulfill his dream of becoming a

priest

so he applied to a seminary and was able

to attend after his mother offered to

pay with her savings

tom felt right at home at the seminary

and didn't get home sick like the other

boys

he was even somewhat mischievous he got

into pillow fights and would talk in the

study hall but he never did anything too

serious

in less than a year he kicked tom out of

the seminary and told him he didn't have

a vocation

tom's dream of becoming a priest was

crushed

afterwards he was forced to move back

into his mother's home

they constantly argued as they did

before until his mother gave up on him

without telling him she sent a police

officer to fetch him after school

and send him to a juvenile delinquent

home

i felt like a criminal but had done

nothing wrong

embarrassed tom would walk a different

route from school to home

so that his classmates would never know

fortunately when his aunt and uncle

found out they petitioned the courts to

have him live with them instead

the first big mistake

by then tom didn't care about graduating

high school

until he saw his aunt making

preparations for his graduation

not wanting to disappoint her he asked

his teacher if there was anything he

could do to graduate

she gave in to his plays and allowed him

to graduate last in his class

in his yearbook he wrote the harder i

try to be good

the worse i get but i may do something

sensational yet

he attended ferris state college

improved his marks and applied to the

university of michigan

after being accepted he couldn't afford

the tuition

so he left to join the marine corps

thinking it was the army

by the time he realized it was too late

he could no longer attend college for

another two years

all he could do was make the best out of

the situation

if i could survive the marines i knew i

could handle anything

while training he decided to focus on

improving himself mentally and

physically

he started reading inspirational books

and would imagine himself building an

empire robbed of college dream

in 1959 tom was dispatched from the

marines

he had two thousand dollars in savings

put aside for his college tuition

but he lost every penny after meeting a

slick businessman

who convinced him to invest in a get

rich quick scheme

with only 15 dollars left in his pockets

he hitchhiked from san diego

to ann arbor he moved in with his

younger brother jim

and got a job as a supervisor for a

local newspaper

he scraped just enough money for his

college tuition but dropped out after

three weeks

he had no money left for books and

decided to try again in the next

semester

to make more money he started selling

newspaper subscriptions

he ended up getting many customers by

offering to deliver

the experience showed him the appeal in

delivery and that when you see an

opportunity

it's important to seize it when the

semester came around

he was able to pay for his tuition and

books but he dropped out again

he was so busy working that he had no

time to study

at 23 years old he was a two-time

dropout driving a beat-up car

he felt like any dreams he had for the

future was falling apart

that's when his younger brother jim came

to his rescue

he heard that a small store was on the

market for a cheap price

it was called dominic's in ipsilanti

near eastern michigan university

he asked tom if he wanted to buy the

store with him they could split shifts

so that tom would have enough time to

study

tom only had 77 dollars in his bank

account

so he took out a 500 loan and bought the

store with jim

right after they signed the agreement

jim got cold feet

he was scared to leave the security of

his job as a mailman

six months later he gave into his fears

after tom took his first night off jim

realized that running the store

was too much work and quit so tom had no

choice but to take over

instead of returning to college at first

he was disappointed he decided that if

he was going to be in the pizza business

it would have to be the best in the

country

forced into homelessness

tom was thinking big but his business

was far from growing

in fact the store was losing money every

single week

when he ran out of money he had no

choice but to live off stale popcorn

that he found in a cupboard for a week

he couldn't afford to eat his own pizza

unless it was burned

eventually he became homeless too he

couldn't pay for his rent and slept in

the store

his luck seemed to be getting worse with

each passing day

one evening half of his staff didn't

show up so that's when he decided to

limit the types of pizzas they made

it turned out to be their most

profitable night ever

from then on he focused on keeping his

menu simple

and delivering for free he was the first

pizza store to do this

after the ipsilanti store became

profitable he decided to open a second

store in mount pleasant near central

michigan university

the night that he signed the agreement

he laid in bed feeling scared to death

why am i taking a risk on a second store

when the first one is doing so well

tom realized it too late to go back on

his commitment

not only was the agreement signed but he

had also purchased the equipment

fortunately it turned out to be a risk

well worth taking

that location along with the first

became the busiest pizza stores in the

country

they sold thousands of pizzas each week

most of its business came from students

living on campus and customers wanting

delivery

challenging the industry standard

after just a few years tom slowly built

his empire

much like he envisioned when he was

training in the marines

when he opened his third store the

former owner called

tom wasn't allowed to use their name

anymore since their customers were

getting confused

so he settled on domino's after one of

his drivers told him he was known as

that guy from domino's

this was the least of his problems the

more pizza he delivered the more issues

he'd encountered

it was hard to keep a balance of the

ingredients staying moist and the crust

crispy so tom asked a manufacturer to

develop a box made of corrugated paper

with holes since it could strengthen

insulation

and retain heat longer they were

reluctant to make it but tom

kept pushing american technology is

putting space satellites in orbit these

days and you're telling me you can't

punch a clean hole in a piece of

cardboard

tom's idea ended up being extremely

cheap and mass producible

it inspired him to come up with more

ideas that became the industry standard

including heated pouches conveyor ovens

doe trays

and commissaries a billion dollar empire

in the late 60s tom attended a franchise

seminar at boston college

there he met ray kroc from mcdonald's

and josh brown from kfc

both men were responsible for turning

what was once a small restaurant

into a major franchise they inspired tom

to continue to deliver as a focus on

franchising

nobody thought you could make money on

delivery most places delivered just to

get some volume before they could afford

to cut out the service

but i thought i could do it it was then

that he set the ambitious goal of

opening

a new store a week by 1969

he nearly met that goal 32 domino stores

open

but almost all of them failed and tom

found himself

1.5 million dollars in debt to avoid

bankruptcy he relinquished control of

the company to a bank

they brought in a so-called expert who

made things even worse by raising prices

and cutting back on quality within a

year

the bank handed the company back to tom

it was in the worst financial shape ever

franchisees filed lawsuits and suppliers

hadn't been paid in a long time

i had well over a thousand creditors and

got lawsuits from about 150 of them

i was on the phone every day telling

them all the same thing

all i can do is pay for my food and rent

so i can stay

open and pay you one at a time

tom slowly won them back and within a

year he paid off his debt

all of the lawsuits in his debt made him

realize that he needed to change his

business model

anyone who wanted to franchise no longer

had to pay an initial fee

instead they had to manage a store for

at least a year

successfully tom's idea not only worked

but proved to be extremely successful

by 1983 there were over one thousand

domino stores

a three thousand percent increase the

company grew even more after tom created

a new policy

if customers didn't receive their order

within 30 minutes

it was free only a year later

tom opened over 5 000 stores and

domino's became the largest pizza

delivery company in the world

he also managed to buy the detroit

tigers today

domino's is worth nine billion dollars

and has stores in more than 85 countries

this is the story of how an orphan with

the worst luck turned a single pizza

store

into a billion dollar empire

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