A Pizza Mogul Gets His Priorities Straight
BY Tom Monaghan
October 12-18, 1997 Issue | Posted 10/12/97 at 2:00 PM
Current post: Founder and president of Domino's Pizza with 5,800 stores in more than 50 countries worldwide; founder and chairman of Legatus, a nationwide organization of Catholic businessmen.
Background: Raised in an orphanage for six and a half years; former U.S. Marine; owned the Detroit Tigers baseball team when they won the World Series in 1984; sponsor of the 1991 Indianapolis 500 winner, team Shierson with driver Arie Luyendyk.
Vision: To achieve excellence in business; to help Catholics be better Catholics.
Domino's Founder Tom Monaghan on the travails of being a good Catholic businessman
From a childhood of poverty, Tom Monaghan rose to the top of the pizza delivery business through a passion for innovation and excellence. At first he thought of becoming a priest, then an architect, but when he could not afford to pay for university studies he joined the Marines. At age 23 he opened a pizza shop in Ypsilanti, Mich., with his brother who soon pulled out of the venture. The business has since grown into a global empire with sales of $2.8 billion in 1996. During the ‘80s and ‘90s Monaghan became a major participant in Catholic works from Latin American missions, to Legatus, an organizationfor Catholic businessmen, to new ventures in Catholic schools and media. He recently spoke with Register assistant editor Gerry Rauch from his office in Ann Arbor, Mich.
Rauch: You are best known as the founder of Domino's Pizza. In fact, you've made Domino's a household word. What's the story behind it all?
Monaghan: I'll try to give you a capsule kind of history. Domino's started in 1960 with one store. We didn't do very well at first. But then it took off after eight, nine months. I took on a partner, but it didn't work out. Then I got on my own in 1965, and changed the name to Domino's, and adopted the symbol with the domino logo.
And we pioneered a lot of innovative things. I was very caught up in all of this. I was excited about it. But then I got into thinking nationally, put together some big plans, took off on a big expansion program, and got into franchising.
And I fell flat on my face, and lost control. I tried to go from an entrepreneurial type of business to a professional type of business overnight by listening to all the experts. I think we had 44 stores when it fell apart.
You mean you went bankrupt?
No, not bankruptcy. The bank talked me into turning over controlling interest to them, and they were going to bring in a so-called expert to run it. After about 10 months of really messing it up, they handed it back to me.
I got it back with a federal class action antitrust suit on my hands, and all the creditors mad because during that 10-month period they just weren't that ethical. They upset the franchisees, they upset the suppliers, and the customers to some degree.
I know you think of the golden rule as the guiding principle for the company. So, it sounds like, during that time, that was not what they were doing.
No, and it confirmed my philosophy of the golden rule.
Over a period of a couple of years of working seven days a week, day and night, we got the debt down, and about May of ‘73, we had about 40 some stores again in a viable situation. Then we got hit with a lawsuit from Domino's sugar. That set us back. We didn't resolve that issue until 1980.
But, by that time, we were still growing. We got up to about 200 stores. When that lawsuit and some other problems were behind us, we took off. We hit 5,000 stores about 1990. In ‘80, we had 300 and some. So, the growth rate was phenomenal.
In ‘83, I bought the [Detroit] Tigers. In ‘85, we moved into our current headquarters.
That was a big growth period.
Yes. Everything seemed to be clicking. I started getting into a lot of trappings of success. The lodge up north took a massive infusion of capital. The airplanes, and the boats, and the Frank Lloyd Wright collection, and the car collection, and additions onto our building, and buying more land around it.
And that's Domino's up to that point. And then there's the spiritual aspect. I was trying to grow my faith life. I had always been a practicing Catholic—going to Mass on Sundays and doing the minimal things you had to do to stay in sanctifying grace and keep it there.
So, up to that point you see yourself as having been a minimal Catholic?
Yes. I would say staying in sanctifying grace would be a minimal Catholic. Some people would interpret it differently. But, that was my definition of minimal.
And then, in 1984, I started going to Mass every day after hearing that [former coach of the Miami Dolphins] Don Shula went to Mass every day. And then not too long after that, one of the ser-monettes by [my pastor] Father Robert Lunsford was on how Mary, in one appearance after another, stressed saying the rosary. That struck me as something that Mary wants. It must be important or she wouldn't be going to all that trouble to get the point across. I figured that the least I could do is spend 15 minutes saying the rosary every day.
Then, I got involved in the Knights of Columbus. I got very active for about a year. And I enjoyed it. I knew I was doing something for the Church.
Then somewhere in there, I got involved in the missions, but that was not until about ‘84 or ‘85 in Honduras. That was certainly very rewarding. I thought I was really doing something that God meant for me to do.
What exactly did you do in Honduras?
I went down there every three months or so and basically funded Father Enrique Silvestre [a village parish priest] and came up with ideas for think I enjoyed the combination of the ideas, and then having a little money to put with it to give it synergy.
Then you started to think that maybe you should be doing something like that full time?
Yes. The thing that changed for me came when I read [C.S. Lewis's] Mere Christianity, the chapter on pride.
Then, I decided that all these airplanes and boats, and the lodge, and the big buildings and everything were a lot of ego. I seemed to remember everything I ever did in my life that was along those lines [of pride], including things up until that time that I thought were virtues—working hard, trying to get somewhere, playing hard in sports.
So, that's when I took my million-aire's vow of poverty. I decided to give up the toys and the things that were meant to impress people, or even would appear to impress people-no airplanes, no yachts, no lodges, no second homes in the resort areas. I gave up the big house I was building which was way more than I needed.
Do you see spiritual fruit from that vow of poverty?
Yes. It was an incredible sense of freedom. Because if there was something out there like a new airplane, or a particular type of car that was greater than any other car, I had to work for it.
All that's gone now. Those are all things that I seemed to be working for that I no longer have to work for. So, it's like a sense of freedom.
What kind of spiritual influence on you were the Felician sisters? You were in their home for boys as a youth.
Everything. That's where I got my faith. In the orphanage, religion was the main part of your life 24 hours a day. The nuns were very religious and close to God, and we prayed a lot, we were in chapel a lot. We didn't do anything without praying.
So, I owe everything to the Felician sisters, everything that's important, mainly my faith.
Where in your history did the NOW (National Organization of Women) conflict come? And how did that play out?
Well, that was about late ‘88, and more than anything that's what led to trying to sell the company. I felt a boycott like they had started could have an impact on a lot of people whose livelihood depended on Domino's. And I felt I could risk my livelihood, and I was willing to do that, but I didn't have the right to risk that of others. So, I decided to sell the company because if there was something I should do, like the thing I did that got me into that boycott, then I wanted to be able to do it.
What was is it you did that got you into that?
That's when the tax-funded abortion issue was on the ballot in Michigan and it was not looking good. And someone asked me if I would get on TV and give $50,000 in a matching contribution, and do a pitch on TV. And I said I would, and I did. And then the roof caved in.
So then a boycott was organized against you for taking that stand publicly?
Yes. And it spread through many, many organizations—the ACLU, etc. Somebody did an editorial exhorting the readers not to buy our pizza. I understand a lot of women's groups on campuses around the country seemed to have every coed on that campus determined not to buy our pizza, and to convince everyone else not to.
I thought there was a segment of America we'd never get back. But I feel, in retrospect, that helped us more than it hurt us. I think about 80 percent of the people don't care. With those people, we just got more awareness because it all hit the wire service. It was on national television at prime time, and the name Domino's, Domino's, Domino's.
Yes. And I think 10 percent of the people may have turned away from us. I think it probably brought as many people at the other side of the spectrum that supported us because of it.
You were also involved in a project to build a new Cathedral in Nicaragua. What happened with that?
[Bernard] Cardinal Law [of Boston], whom I had gotten to know for some time, called me, and said “I'm calling on behalf of Cardinal Obando [y Bravo] in Nicaragua.” He told me the story about the cathedral being destroyed and how they wanted to build a new cathedral.
And he talked about the significance of it because Nicaragua was a communist country, and it was a toehold for communism in Latin America, which has half the Catholics in the world. So the cathedral was an important symbol.
I said, “Well, I'll go down and talk to them.” So, I did. One thing led to another and I made a commitment. Then, of course, they said, “That's fine, but we have no money.” So, basically I said “if I raise 80 percent of it, you raise the other 20 percent.”
There was a lot of opposition to going ahead with the project?
Up here there was—when we tried to raise money. It was an education for me. I heard about dissension in the Church, but I never experienced it. It came mostly from priests and nuns. And it sounded something like: “The cardinal's building a monument to himself and he's a male authoritative type and the people don't want that. They want medicine. They want food.”
It was pretty impassioned opposition. They wouldn't buy the fact that these were communist atheists. The big deal in the media seemed to be supporting the Sandinistas, and they wouldn't call them communist or Marxist.
Then it also turned out to be very difficult to build a church down there in a country that had been communist for some time. There was no infrastructure. They took one of the better economies, growing faster for many, many years, and just wiped it out. It became the poorest country in the hemisphere.
One of the themes that runs through a lot of your life, in the business, with the Cathedral, is overcoming adversity. It seems almost like a theme song of your life. Is that right?
Yes. It's because I don't start thinking sometimes until I get in trouble.
So, you think some of the adversity is self-created, not just the way the world is.
Yes. I get in trouble then I think a little.
On the success side, how did it feel to win the World Series and the Indianapolis 500?
It felt great to win both of them, but those aren't lasting feelings. And neither one of them do a lot of good for business. You wonder why you do it after you win it. At least, when you're doing it, you're thinking that someone ate pizza because of it.
In the last couple of years, you started
Well, where do I start? I felt there was a need to communicate with Catholics about what's going on in the world. We were interested in apologetics because most of the people weren't going to Church. We wanted to tell them what was going on in the Catholic Church so that they might get involved.
We were interested in exposing any dissension that was going on, such as a lecture series that came to town with the best-known dissenters in the Catholic Church. We felt people were being led astray and wanted to charitably set them straight.
We wanted to attack pornography. We wanted to keep the media honest as far as the way they are biased against the Catholic Church, and the family in general. We wanted to challenge them on the right and the moral standards that people in our country were brought up with, and the Church taught, and things like that.
What do you envision for
My goal is to get it to being weekly. We just can't get on top of current issues, react fast enough, so we hope to get to weekly as soon as possible. It's a matter of filling up the staff.
What about WDEO?
Well, of course the big thing is the Al Kresta Show. We hope that this can be syndicated around the country, potentially live, or delayed. I think he's got to be the most talented Catholic radio personality in the country. He's very bright and very good with words and with radio. He had one of the most popular religious radio shows in the country on a Detroit station.
And on schools—Spiritus Sanctus Academy—what have you done so far and what's your vision for the future?
Well, we have one school with 110 students through the eighth grade. We have Mass and rosary everyday, and confession available every week. We have the Blessed Sacrament Chapel. All our teachers are knowledgeable and devout Catholics. There's discipline. Religion is the number one subject.
We now have Mother Assumpta Long's new religious order running the school. I expect that to be a very rapidly growing order. There is an incredible amount of interest already among young women. We're building a convent for the sisters.
And we've got three new schools on the drawing board and they're approved by the diocese and the bishop.
What about your corporate headquarters? You have a corporate chaplain and a chapel where the Eucharist is reserved for Masses each weekday. Confessions are available.
Yes, and there's a bigger First Friday Mass, and a Tuesday Mass with a men's breakfast.
I'm basically at the service of the bishop and whatever we can do to serve him in any role that he wants us to fill.
We have a lot of land here and we use that land to serve the Church. There are a number of orders, new orders, or orders that want to get started. We let them start here. We have land, and we have houses. If they are orthodox, and if they get welcomed by the bishop, we will provide some support for them and help them get started. So, we're sort of planting seeds and using this property for that purpose.
Do you want to say anything about your Christmas lights?
We've been doing that for about 10 or 11 years. Our light show has close to a million lights. We attract about 250,000 people coming through over a 30-day period during the Christmas season. All of the proceeds go to various charities in the area.
The entire show is spiritual in nature. There's no Santa Claus except the one kneeling down over the crib of the infant Jesus. There are no reindeer—no Rudolphs. There are a lot of angels, and a live nativity scene, and the biblical scenes surrounding Christmas. Some of that came out of the stuff constantly in the news about creches being forbidden from public places.
Among your Catholic works am I correct that Legatus is the one that you, in a sense, feel the strongest about?
Yes. I think that was not my idea, that was the Holy Spirit's. I see my mission as two parts. One is Legatus. Two is being a good Legatus member. And by being a Legatus member, I think I should use what God has given me to serve him.
What exactly is Legatus?
Legatus is an organization for Catholic heads of corporations, CEOs, presidents, chairmen of companies of a certain minimum size. In a nutshell, the purpose is to help them to be better Catholics. And the reason for this ministry is that more than any other category of people they are in the position to do more if they put their efforts to it, and their talents, and their resources. That's what Legatus is about.
How did it start?
It started within hours after I met the Pope for the first time—in Rome in 1987, on May 7.I was a member of YPO [Young Presidents Organization]. But at 50, I was at the age when I had to leave the organization. It occurred to me there ought to be something like YPO for Catholics, without an age limit. And it just struck, it hit.
And that's all I thought of the rest of that trip, all the way home. I put the thing together on the plane: the format, the criteria.
It was very rewarding. I could see how people got turned on. They'd never been in a situation where it was all Catholics, so they could talk about their faith openly-which should be, and often is, the most important thing of their lives.
A lot of them told me that they are now going to Mass every day, and saying the rosary every day, as a result of Legatus. Or they have told me they're operating their business differently today because of Legatus.
If you had a chance to tell the Catholic bishops something that would help them get a picture of the business world for Catholics, what would you say?
Well, I would want to say the media is biased. I would say, “You bishops know how biased the media is against the Church. I'm telling you that it's the same way against business. I've seen so many clergy that feel that businessmen are all crooks. I don't believe that's true. I believe that you don't get to the top of a business by being dishonest and crooked. You're not going to get very far that way. People are not going to trust you. They're not going to do business with you. They're not going to work for you. They're not going to buy from you.
“By and large, successful business people are successful because they're honest and hard working, and give value for the price. Most of the time, they took a lot of risk for many years, oftentimes at minimum wage, just to get something going. And they provide a lot of jobs. So, don't be biased against businessmen.”
The Pope says that when you put together labor and capital, labor is the most important. How do you see that in Domino's?
I would say that labor is the most important thing in business. The book that says the customer is number two is right on. Just from a business standpoint, a selfish standpoint, you take care of the employee first because he is the one that takes care of the customer. But you also do it because it's the right thing to do because he's a human being.
But I don't believe in giving employees more than they are providing in the way of services because that hurts the whole enterprise and the most important thing in a business is to survive. So, sometimes there have to be layoffs, or people have to go for a long time without increases in pay. It's not easy to survive. In fact, it's very difficult.
That's something I've heard various Legatus members say—that almost everybody who hasn't been there overlooks how difficult it is just to survive in business.
That's exactly why a Legatus person is a very special person, because not many people can do that. Not many people get there. A lot of people try. I know in the restaurant business alone—and this is an old statistic but I don't think it's changed or that it's unique to the restaurant business—90 percent of businesses fail within the first year.
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