Domino's CEO fails to deliver specifics on wage hikes

Domino's Pizza (DPZ) is finding it harder to hire qualified workers and may have to raise wages. “I think the job market continues to improve, the competition for great people continues to get tougher and so we got to respond… and we got to be competitive to get great people,” said Domino’s CEO Patrick Doyle.

The pressure to raise wages is fierce. Labor groups and activists have been demanding a "living wage" nationwide, and McDonald's (MCD) and retailers such as Target (TGT) and Walmart (WMT) have announced they will be raising wages.

Recently, the New York State Attorney General settled with some Domino's franchises who own about 36 Domino's locations for labor violations, including underpaying workers and not paying overtime. New York State Attorney General Eric Schneiderman had a direct message to the Domino’s CEO "to protect the Domino's brand, protect the basic rights of the people who wear the Domino's uniform, who make and deliver your pizzas."

“We take great care of our people, I’m going to continue to make sure we take great care of our people,” replied Doyle, and acknowledged it was “unfortunate” for the employees of those franchises. "Look, we got to be competitive, to have the best people who are giving the best service to our customers and we’re committed to doing that."

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Complicating a possible wage increase is Domino's franchise situation.  92% of Domino's locations are franchises, and local owners set pay and benefits for their workers.  Although fellow fast-food giant McDonald's got a lot of attention with its announcement that it will increase hourly wages to around $10 an hour starting in July, 90% of McDonald's locations are also franchises, and the wage hike affects only the 1,500 locations that are corporate owned.

Will Domino's follow the golden arches moves to raise starting wages? “We are well above it on average; we got to react to the market,” said Doyle. “The vast majority of our workers are drivers. They’re tipped so they’re making well above the starting or minimum wage.”

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