Instead Of Earning Hundreds Of Millions Of Dollars, The Co-Founder Of Domino's Pizza Made One Huge Mistake…

By on July 29, 2015 in ArticlesEntertainment

As you could probably guess, Domino's is a world leader in pizza delivery  Whether you love them, hate them, or only order them when you're drunk, you can't escape the ubiquitous red, white and blue Pizza logo. They are the Starbucks of pizza. There seems to be a Domino's franchise every few blocks. That's actually not that far off. Domino's Pizza employs more than 220,000 people in 73 countries. You can get a pepperoni pizza in "30 minutes or less" in 5,700 cities around the world. As of 2014 (the last data found), there are nearly 11,000 Domino's with the bulk of them located in the U.S., U.K., and India. Worldwide, Pizza is a $35 billion per year industry and Domino's Pizza controls $1.8 billion of the proverbial pie.

The Domino's Pizza empire started when two brothers in Michigan purchased a pizza restaurant called DomiNick's back in 1960. So where are the Monaghan brothers today? Are they sitting on private islands with yachts and mansions around the world? Not exactly. One brother could certainly afford these luxuries. The other brother ended up making a VERY BAD decision…

Getty Images

Getty Images

In 1960, Tom and James Monaghan bought a small pizza store called DomiNick's in Ypsilanti, Michigan near the campus of Eastern Michigan University. They picked up the joint for a $500 down payment plus a loan of $900. The brothers planned to split the work at the pizza shop evenly, but James quickly found that didn't work for him. You see, he had a full time job as a postman with benefits and a pension. He couldn't see giving THAT up for a small pizza restaurant near a university. So before their first year anniversary, James traded his half of DomiNick's to his brother Tom. What did he receive in return? One used VW Beetle that had previously been used as a pizza delivery car.

DomiNick's grew like a rocketship under Tom Monaghan's leadership. In 1965 he purchased two more pizzerias. The store's original owner didn't want Tom to use his name on the new stores so it was at this point that DomiNick's became Domino's.

In 1965, Domino's Pizza, Inc. was officially born.

By the time Domino's Pizza had been in business for 10 years, there were 200 Domino's Pizza location. By the company's 15th year in business, there were 1,000 locations. That was also the year they expanded outside of the United States when Domino's opened in Winnipeg, Canada. Today, 55 years after the first Domino's Pizza opened in Ypsilanti, it is the largest worldwide pizza franchise and second biggest in the U.S. behind Pizza Hut.

In short, Domino's became a worldwide juggernaut. Perhaps it's a good thing that James got out when he did. After all, if he couldn't handle running one store, how would he have been able to handle 11,000?!?! Today Domino's has locations in 73 countries and nearly $2 billion in yearly revenue?

What happened to Tom Monaghan, the brother who stayed with Domino's? In 1998, Tom sold 93 percent of Domino's Pizza for $1 billion dollars.

Tom lived a lavish life for many years. He even bought the Detroit Tigers. His entire life changed after he read a passage about the dangers of pride written by C.S. Lewis. This simple passage would inspire Tom to give up many of the trappings of his formerly lavish life. He soon became one of America's biggest philanthropists.

Joe Raedle/Getty Images

Joe Raedle/Getty Images

Meanwhile Tom's brother James essentially traded a $500 million for a used VW Bug that probably reeked of old pizza. Ouch. Actually it's worse. $500 million would have just been his share of the 1998 sale proceeds. Tom Monaghan likely earned hundreds of millions more over the previous decades running the wildly successful pizza empire.

On the bright side, James is entitled to free pizza for life!

Articles Written by Amy Lamare
Amy Lamare is a Los Angeles based writer covering business, technology, entertainment, philanthropy, and pop culture. She spent 8 1/2 years covering the entertainment industry for www.hsx.com. She attended the University of Southern California where she majored in Creative Writing. An avid long distance runner, weekends she can be found running the streets of Los Angeles training for 1/2 and full marathons. Follow her on Facebook.
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