Erosion risks

• Competitor store expansion and discounting
• Delivery aggregators reduce brand differentiation
• Franchisee economics weaken, slowing net unit growth

Leading indicators

• U.S. net unit growth
• U.S. delivery time metrics
• U.S. same-store sales and order counts

Counterarguments

• Pizza is highly substitutable; convenience advantage can be matched with third-party delivery.
• Store density can become a cost burden if traffic shifts away from delivery/carryout.

Erosion risks

• Loyalty program imitation by rivals
• Consumer trade-down to cheaper options or grocery/frozen pizza
• Aggregator UI/marketing disintermediates the brand

Leading indicators

• Order count growth
• Loyalty member activity and repeat rate
• Mix of orders via aggregators vs owned channels

Counterarguments

• Consumer switching costs are near-zero; value wars can quickly shift share.
• Aggregators can commoditize the ordering experience and redirect demand to the cheapest option.

Erosion risks

• Labor availability and wage inflation
• Technology parity from competitors
• Service degradation during peak periods

Leading indicators

• Delivery time and on-time metrics
• Customer complaints / refund rates
• Franchisee labor turnover

Counterarguments

• Operational best practices can diffuse; competitors can narrow the speed/quality gap.
• If service quality slips, the advantage reverses quickly because consumers have many alternatives.

Erosion risks

• Brand damage from service failures or food safety incidents
• Sustained quality gaps vs competitors
• Negative social media sentiment spikes

Leading indicators

• Brand consideration / preference surveys
• Net promoter score (NPS) trends
• Digital app ratings and review trends

Counterarguments

• Pizza brands are often deal-driven; brand equity can be overwhelmed by aggressive competitor promotions.

Erosion risks

• Franchisee pushback / more purchases from approved third parties
• Commodity price spikes compressing franchisee profitability
• Transportation and labor disruption

Leading indicators

• Supply chain gross margin trend
• Fill rates / service levels
• Franchisee satisfaction and disputes

Counterarguments

• Broadline distributors and approved suppliers can substitute for some inputs.
• Company has shifted some categories (e.g., equipment/supplies) to third-party suppliers, reducing vertical scope.

Erosion risks

• Scale advantage narrows if store/order volumes slow
• Supplier concentration or input shortages (cheese, flour) raise costs
• Regulatory or fuel-cost shocks increase distribution costs

Leading indicators

• Food basket pricing changes
• Commodity indices vs supply chain gross margin
• Order volume / case volume growth

Counterarguments

• Cost advantages can be offset if franchisees demand price relief during inflation.
• Competitors can negotiate similar commodity contracts at scale.

Erosion risks

• Rising logistics costs (fuel, maintenance)
• Service disruptions from weather or labor disputes
• Asset utilization declines if volume slows

Leading indicators

• Distribution cost per case
• On-time delivery to stores
• Capex and lease commitments for supply chain assets

Counterarguments

• Third-party logistics and distributors can replicate most distribution capabilities.
• Asset-heavy footprint can become a disadvantage if volumes decline.

Erosion risks

• Local competitors with stronger cultural fit
• FX volatility and macro shocks reducing consumer demand
• Geopolitical/regulatory constraints on franchise operations

Leading indicators

• International same-store sales
• International net unit growth
• Country-level franchisee profitability

Counterarguments

• Pizza demand and competitive intensity vary widely by country; the brand is not uniformly strong everywhere.

Erosion risks

• Technology gap closes as rivals modernize apps and delivery tracking
• Franchisee execution variance harms customer experience
• Aggregators weaken direct customer relationship

Leading indicators

• Digital order mix internationally
• Franchisee compliance / audit outcomes
• App ratings and customer experience metrics

Counterarguments

• Ecosystem advantages may be market-specific and harder to enforce across diverse franchisees.
• Aggregators shift bargaining power toward platforms and away from individual brands.