5 Steps in Building the Best Food Franchise – Lessons from Mang Inasal
Only a few of us will become overnight millionares as the person that won the P741 million Grand lotto jackpot last December, last year. While many of us long to have the same good fortune, some of us get rich the old-fashioned way: by dint of hard work and doing good business.
In that class belongs Edgar Sia II, who became a billionaire when Jollibee Foods Corp. bought 70% of his upstart food company, Mang Inasal, in November 2010 for P3 Billion.
Here are his 5 steps to success:
Step 1: Mop the Floor
Much is said of being hands-on with your business, but with Mr. Sia,
who started Mang Inasal at 26 years old, he couldn’t be hands on enough.
“It has been said many times that Mr. Sia would mop the floors of his
first few restaurants. This speaks volumes of his humility and
character,” says Lex Ledesma, a native of Iloilo province who is the
executive director of The One School and a serial entrepreneur himself.
Incredibly, Sia was doing these menial jobs at Mang Inasal while
running four other businesses in Iloilo. As his business was expanding,
Mr. Sia insisted on personally knowing a place where a Mang Inasal
branch would be put up. As a result, “Mr. Sia has thorough graps of
locations in the country,” says Armando “Butz” Bartolome of GMB Franchise Developers, who Sia approached to help build Mang Inasal’s franchising
operations. “He traveled to every town using various means of
transportation and staying in any type of hotel. It was his way of
understanding the culture and habits of each town.
Step 2: Make a Gamble
Sia is renowned by his peers as a business-minded risk taker. For
instance, Mr Sia bought and sold cars from classmates and friends soon
after graduating from Iloilo Central Commercial High School, the
country’s second oldest Filipino Chinese school, according to car
salesman Jun Banares, whose brother went to the same school.
Mr. Sia made a gamble when he went out and took the effort of
locating his first Mang Inasal outlet at a parking building instead of
inside a mall. And then expanding the space he rented from just 100 sq m
to thrice its size.
Step 3: Think of the Customers
Despite the fame that business success could bring. Sia was never one
to hog the spotlight. Innately shy, Mr. Sia would come to Mang Inasal
stores anonymously, and when the staff did recognize him, he’d tell the
staff not to accommodate him.
Another time when the 320 sq m restaurant was overflowing with
customers beyond its 300 seat capacity, Mr. Sia requested Robinson’s
management to let them place more tables and chairs around the store’s
perimeter so around 80 more people could be seated – and the mall bosses
agreed at no additional rental cost to Mang Inasal.
Step 4: Spread the Wealth
Mr. Sia is a hero in Iloilo not only for putting up a national brand
from the provinces but also for giving opportunities to small-scale
suppliers around Mang Inasal outlets across the country.
“During the time he was putting up Mang Insal, he found an old lady
in the public market at a corner selling some baskets of kalamansi. He
then asked her to supply his first few branches. The woman found herself
earning more than she could ever dream of in her lifetime.”
For all the wealth he’s amassed, Mr. Sia has given back to the
community, both silently and through his Injap Foundation Inc., which
recently pledged P25 million as seed money for a new public college in
Iloilo City.
Step 5: Be Unique, then Franchise
Although offering chicken inasal is not an original concept, Sia
built Mang Inasal’s brand on three things: new idea, an irresistible
offer and franchising.
“In my opinion, Mang Inasal is a Bule Ocean (concept), being the
first and only fast-food inasal chicken vendor in the market,” says
Ledesma. “Jollibee tried to compete by offering a similar product before
finally realizing that it made more sense to just acquire its
competitor.”
“Jollibee buying Mang Inasal is a proof that if an entrepreneur
aspires to go big-time, “its not enough that you have a good product.
You have to create a niche and have a clear unique selling proposition”.
“Mr. Sia didn’t even create a new product, but instead presented an
old product in a whole new way. It also helped that had the marketing
know-how to create the unlimited rice trend.”
“That’s why for entrepreneurs, the first challenge should be to grow
the business so that your business will get noticed. One should be able
to achieve brand position,” says Bartolome.
“This even, he adds, proves that in time and through franchising,
any small business can grow and entrepreneurs can be rewarded when big
and mature companies take notice and offer you a price you cannot
refuse.” These opportunities can come, as a result of years of
commitment and focus on the business you have.
Mang Inasal Sale By the Numbers
P3 Billion
- Jollibee’s investment in Mang Inasal
- Jollibee’s investment in Mang Inasal
7 Percent
- The amount the Mang Inasal purchase would add to Jollibee’s net operating income
- The amount the Mang Inasal purchase would add to Jollibee’s net operating income
P2.6 Billion
- The total operating income reported by Jollibee for the first nine months of 2010
- The total operating income reported by Jollibee for the first nine months of 2010
P3.5 Billion
- Jollibee’s estimated total operating income for the year 2010
- Jollibee’s estimated total operating income for the year 2010
P245 million
- The estimated contribution of Mang Insal to Jollibee’s earnings for 2010, representing Jollibee’s 70 percent share in Mang Inasal.
- The estimated contribution of Mang Insal to Jollibee’s earnings for 2010, representing Jollibee’s 70 percent share in Mang Inasal.
by Jimbo Gulle
Entrepreneur
Entrepreneur
