Domino’s Pizza has agreed to fork out $4 million for the company’s Danish franchise that was forced to close last year after a television investigation exposed out-of-date food and rat-infested conditions.
The publicly-listed business will pay 2.5 million euros ($A3.95 million) for the company-owned stores and other assets of Domino’s Pizza Scandinavia.
It was once the largest pizza chain in Denmark, but an investigative program Operation-X exposed systemic relabelling of expired food, poor working conditions, rat infestations and terrible hygiene that sent the company spiralling into administration.
Several former employees and managers told the investigation they were instructed and trained to relabel products to extend their shelf life and reduce waste costs.
“The problem with systematically changing dates is that they can totally lose track of how old the food is. It can result in food old enough to be harmful to your health,” said Charlotte Kølln, the head of the Operation-X team.
One Domino’s contained “rat-paw prints and massive amount of excrement”, while 21 of the 30 stores were found to be breaking food regulations.
Domino’s Pizza Enterprises (DPE) say the deal will be completed in the next two months and expects to restart operations in about 20 stores within the year.
“DPE will use its business know-how to carefully reinvigorate operations in Denmark which will be led be senior executives within DPE Europe who will relocate to Denmark,” the company said in a statement released to the ASX.
But the fast-food brand said the country’s population of 5.7 million people could support about 150 stores.
“As a result of the acquisition, DPE is revising its future store count target in Europe from 2700 to 2850,” the release said.
“Re-establishing operations will require additional investment in store equipment, IT systems and other central support.
“The impact on FY19 underlying earnings per share is not material.
“As a small territory initially, the Denmark business will take some time to contribute to earnings.”
The company said it continued to keep an eye on global acquisition opportunities around the world.