The Maker of the Matabang Bubuyog na

Mahilig Sumayaw

Tony Tan Caktiongs Jollibee has been one of the most admired, most copied,
most innovative and most professionally-run company here in the Philippines. It has
been the number one fastfood chain overtaking giants such as Mc Donalds and
Kentucky Fried Chicken or KFC.

How did a local jolly red bee knocked down a multinational red-haired clown
named Ronald? Lets see another inspiring story of the founder of one of my ideal
businesses. With its success, a Jollibee franchise has now a tag price of P25+ Million
(US$ 500,000+). Wow!

Tony Tan Caktiongs Life and his Jollibee company is another rugs to riches
story of an entrepreneur that truly inspires everyone. Tony was the third of seven
siblings born to poor parents who migrated from the Fujian province in China to
look for a better life here in the Philippines. His father began as a chef in a Chinese
Temple. Not later on his father was invited to open a restaurant business in Davao
so the whole family moved south. All together, they helped one another in managing
the restaurant business which in turn became profitable. This allowed young Tony
to return back to Manila and pursue his course Chemical Engineering at the
University of Santo Tomas (UST).

In 1975, Tony and his colleagues went on a visit to a Magnolia Ice Cream
plant located in Quezon City and learned that it was offering franchise when he saw
a poster for it. By the month of May, with his family savings, he took P350,000 to
grab the franchise opportunity and opened two Magnolia ice cream parlors named
Cubao Ice Cream House located near the Coronet Theater, and Quiapo Ice Cream
House located beside the bridge the one going to ilalim near a Mercury Drug
outlet. They all worked hands-on but as the business propels, they noticed they could
not do it all so they started to set up an organization hired store managers, and trained
people.

Tony started with just two ice cream. Then after two years, he offered chicken
and hamburger sandwiches, because customers were telling them they didnt want
to be eating ice cream all the time. They prepared the food in the back kitchen, and
soon noticed that people were lining up more for hamburgers than for ice cream.
Then in 1978, when they already had six ice cream parlors, they asked themselves:
Why dont we change into a hamburger house?

That was also the time they decided to incorporate and realized thet
they needed a brand name. They were looking for a symbol that would represent the
group, and because Tony was very impressed with Disneyland characters, they
decided on a bee. The bee is a busy creature that produces honey one of lifes
sweetest things. They thought it would be a very good symbol to represent
everybody. They decided they would all be very busy and happy at the same time,
because if they were busy but not happy, it wouldnt be worth it. Thats why they
put the word jolly and just changed the y into i to form a brand name
JOLLIBEE.
It wasnt long before we heard that the multinationals were coming in
including McDonalds. Friends started asking us if we were going to get a
McDonalds franchise but I remember saying, if you franchise, you cant grow
outside the Philippines, says Tony.

McDonalds came in 1982, but they didnt feel threatened because they were
a little nave and Jollibee was doing very well. They found McDonalds to be very
good at everything, but it didnt know the local culture. They knew the Filipinos
taste buds and what he liked in food, so they offered him flavorful and good-tasting
products. He likes pasta, so they started offering spaghetti. He likes chicken, so they
came up with good fried chicken by mixing different flavors. They also knew
something important all along: Filipino taste is sweet. This is very Filipino very
Asian. He said: If we eat anything sweet; we dont really think its sweet; but try
giving it to a foreigner and theyd be surprised.

Tony narrates: Filipinos also like to smell their food before they eat it. They want
to be sure it smells delicious before they take a bite. Sometimes they would open a
kettle and say, whats this? It smells good! This was proved by the Langhap-Sarap
advertising campaign by Basic [Footcone and Belding]. They did it for us initially
for the hamburger, and when it became successful, we started using it as a campaign
slogan for the other products.

It didnt take them long to introduce new products when they were starting
out. The family members would discuss what new products customers would like,
and without much marketing theyd bring something out like spaghetti. Tonys
sister is also a good cook, so she would come up with a new recipe, they would
comment on it, and then shed fix the recipe before they started offering it. Before,
it was simple. Now, theres a formal structure. Theres a big Research and
Development (R&D) department and a marketing department. The marketing
department gets inputs from customers and the products they like, and then
communicate that to R&D. R&D then develops it. We have an internal taste panel
that taste the food and comment on it, and when a formulation is needed they do it.
The next step is a consumer panel test. We have the product taste-tested by
consumers, and if its okay, we test the product in a few stores. Before it was easy,
but now it takes three to six months to roll out a new product. Another time-
consuming process is training our people on how to prepare and serve the new
product. says Tony.

Jollibee group has also become bigger. Now they have Chowking, Greenwich,
Delifrance, and the recently acquired Red Ribbon. Greenwich pizza started as an
over-the-counter pizza store at the Greenhills Shopping Center in San Juan, Metro
Manila, in 1971. One time, the founder approached Tony to ask if they were
interested at that time she has 50 kiosks and having difficulty managing the
business when she asked them if they were interested, Tony said, why not? Lets
form a joint venture. They took over the management in 1994, but they retained the
taste of her products because it suits the local market. On the other hand, they took
over Chowking in 2000 because Chinese food is also very popular among Filipinos,
but there was no good company serving the market. So, they took over and worked
on it.

Delifrance is doing so-so. And the reason is because were still not used to
eating bread as a meal therefore, the market is limited to the AB classes. It cant
grow into a mass-market type. Our latest acquisition was Red Ribbon Bakeshop last
2005 to include cakes, rolls, breads and pastries in their line of products. For us to
sustain a good growth rate on a long-term basis, we have to continue acquiring
businesses, Tony relates.

They had to let go of Binggo. They found that the convenience store was in a
totally different industry. At one time, they had around 20 stores, but they found it
hard supplying them because the volume they were buying for them was just too
small to attract good suppliers. They had to let it go.

Theyre also bullish on China because theyve acquired Yonghe King and its
91 stores. Its making money. So, theres no pressure to turn it around; the challenge
is how to expand the brand. China is huge; its like having several countries in one
country. If we do well, we can have several thousand stores there. If Jollibee has
more than 500 stores for 80 million Filipinos, how many stores can you put up for
1.3 Billion Chinese? Kentucky Fried Chicken alone is opening 200 stores a year in
China. Its doing very well, says Tony.

Many countries share our taste in food, and the opportunity is in going to
China, India and Indonesia- countries with large populations. We usually do a very
broad 10-year horizon but its not detailed. We have a five-year plan, a three-year
plan, and a one-year plan. We have plans for China and India, but if we want to go
to India, well need a long-term plan. We might have to start putting Indian people
into the organization and it would probably take at least three years before we sent
them back. In China, we had an opportunity to break into the market with Yonghe,
but because our people didnt speak the language, we had to hire translators to help
us out. We still send our people there, but they have to work with translators. We
also need good people here. Were lucky to be the leader, but its still a competitive
market. You cant afford mistakes because customers will leave if theyre not happy
with you. The food business is still very basic. Its still about taste. Its still about
How did you serve me? Is your place nice? Am I treated well? Do I get value? If
you think about it, if were going out to eat, these are the basic things we look out
for, but the execution is the difficult part. Its not like other businesses where its the
concept or the knowledge thats difficult. Here, theres no secret; its very easy, but
its the execution thats hard. If you ask a lot of restaurant, they know all these things.
Executing day by day is whats hard., Tony continues.

When asked whats the secret of Jollibees success, Tony says: If you have
to ask, the secret of Jollibees success is sharing. We share our success with people;
we give good compensation; we share any honor that comes our way. Actually, this
idea of sharing didnt come from me. It came from a friend. He said: You know why
youre successful? You know how to share. A lot of people do not share, but in
Jollibee you share a lot with your people.

Truly, Tony Tan Caktiong is another exemplar example of an inspiring

entrepreneur. He had all the achievements from Management Man of the Year in
2002 to an Agora Award for Outstanding Marketing Achievement, from a Triple A
Alumni Award from the Asian Institute of Management to a Ten Outstanding Young
Men Award for Entrepreneurship. And to cap it all, he also won the World
Entrepreneur of The Year 2004 by Ernst & Young besting other 31 world
entrepreneur competitors.

On July 25, 2007, Jollibee Group launched Tio Pepes Karinderia in EDSA
Central in Mandaluyong, its pilot restaurant to professionalize Filipinos
Carinderia Industry.

As of 2007, Jollibee had under its wing 1,385 stores in the country: Jollibee
(583); Chowking (367); Greenwich (237); Red Ribbon (163); and Delifrance (35)

Overseas, Jollibee Group has 174 stores: Yonghe King in China (102);
Jollibee in US (12); Red Ribbon in US (19); Chowking in US (12); Chowking in
Dubai (7); Chowking in Indonesia (5); Jollibee in Other Countries (16) and one Chun
Shui Tang, a teahouse in Taiwan.